0000701347false00007013472024-10-302024-10-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):
October 30, 2024

Central Pacific Financial Corp.
(Exact name of registrant as specified in its charter)
 
Hawaii 001-31567 99-0212597
(State or other
jurisdiction of
incorporation)		 (Commission
File Number)		 (I.R.S. Employer
Identification No.)
 
220 South King Street, Honolulu, Hawaii
(Address of principal executive offices)

96813
(Zip Code)

(808) 544-0500
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, No Par ValueCPFNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On October 30, 2024, Central Pacific Financial Corp. (the "Company") issued a press release regarding its results of operations and financial condition for the quarter ended September 30, 2024. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.


ITEM 7.01. REGULATION FD DISCLOSURE

On October 30, 2024, Central Pacific Financial Corp. will hold an investor conference call and webcast to discuss financial results for the quarter ended September 30, 2024, including the attached press release and other matters relating to the Company.

The Company has also made available on its website a slide presentation containing certain additional information about the Company's financial results for the quarter ended September 30, 2024 (the "Earnings Supplement"). The Earnings Supplement is furnished herewith as Exhibit 99.2 and is incorporated herein by reference. All information in Exhibit 99.2 is presented as of the particular date or dates referenced therein, and the Company does not undertake any obligation to, and disclaims any duty to, update any of the information provided except as required by law.

The Earnings Supplement contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and, as such, may involve known and unknown risks, uncertainties and assumptions. These forward-looking statements relate to the Company’s current expectations and are subject to the limitations and qualifications set forth in the attached presentation as well as in the Company’s other documents filed with the Securities and Exchange Commission, including, without limitation, that actual events and/or results may differ materially from those projected in such forward-looking statements.

The information provided in Items 2.02 and 7.01 of this Current Report, including Exhibits 99.1 and 99.2, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall the information in Exhibits 99.1 and 99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.


ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d)Exhibits
 99.1
99.2
104Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 Central Pacific Financial Corp.
 (Registrant)
 
 
Date:October 30, 2024/s/ David S. Morimoto
David S. Morimoto
Senior Executive Vice President and Chief Financial Officer



Exhibit 99.1
cpfmidnighta.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 2024 EARNINGS

Highlights include:
•Net income of $13.3 million, or $0.49 per diluted share. Excluding $3.1 million in pre-tax expenses related to a strategic opportunity, adjusted net income (non-GAAP) was $15.7 million, or $0.58 per diluted share.
•Net interest margin of 3.07% increased by 10 bps from 2.97% in the previous quarter
•Total loans of $5.34 billion decreased by $41.0 million from the previous quarter
•Core deposits of $5.97 billion increased by $53.9 million from the previous quarter. Total deposits of $6.58 billion increased by $0.6 million from the previous quarter, which included a decrease in government time deposits of $69.1 million.
•Total risk-based capital and common equity tier 1 ratios of 15.3% and 12.1%, respectively
•The CPF Board of Directors approved a quarterly cash dividend of $0.26 per share

HONOLULU, HI, October 30, 2024 – Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $13.3 million, or fully diluted earnings per share ("EPS") of $0.49 for the third quarter of 2024, compared to net income of $15.8 million, or EPS of $0.58 in the previous quarter and net income of $13.1 million, or EPS of $0.49 in the year-ago quarter. Results for the third quarter of 2024 were impacted by $3.1 million in pre-tax expenses related to our evaluation and assessment of a strategic opportunity. While the parties are no longer currently engaged in discussions, we remain interested in the opportunity under the right terms and conditions. Excluding these expenses, adjusted net income and EPS (non-GAAP) for the quarter was approximately $15.7 million and $0.58, respectively.

"Our third quarter core results were strong and we continue to pursue our strategies for future growth and additional internal operating efficiencies," said Arnold Martines, Chairman, President and Chief Executive Officer. "Our net interest income and net interest margin expanded as we successfully managed the balance sheet and repricing in this evolving interest rate environment."

"Central Pacific remains committed to supporting our customers and communities. We were pleased to open a new state-of-the-art branch in Kahului to support the business and personal financial needs of the Maui community as we move to expand our presence on the neighbor islands," Martines said.

Earnings Highlights
Net interest income was $53.9 million for the third quarter of 2024, which increased by $1.9 million, or 3.7% from the previous quarter, and increased by $1.9 million, or 3.7% from the year-ago quarter. Net interest margin ("NIM") was 3.07% for the third quarter of 2024, an increase of 10 basis points ("bp" or "bps") from the previous quarter and an increase of 19 bp from the year-ago


Central Pacific Financial Reports Third Quarter 2024 Earnings
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quarter. The sequential quarter increase in net interest income and NIM was primarily due to higher average yields earned on investment securities and loans of 11 and 9 bps, respectively, combined with a 1 bp decline in average rates paid on interest-bearing deposits. The higher average yield earned on investment securities in the third quarter of 2024 includes $1.1 million in income from an interest rate swap that became effective on March 31, 2024, compared to $0.9 million in the second quarter of 2024.

The Company recorded a provision for credit losses of $2.8 million in the third quarter of 2024, compared to a provision of $2.2 million in the previous quarter and a provision of $4.9 million in the year-ago quarter. The provision in the current quarter consisted of a provision for credit losses on loans of $3.0 million, offset by a credit to the provision for off-balance sheet exposures of $0.2 million.

Other operating income totaled $12.7 million for the third quarter of 2024, compared to $12.1 million in the previous quarter and $10.0 million in the year-ago quarter. The higher other operating income was primarily due to higher income from bank-owned life insurance of $0.7 million, partially offset by lower mortgage banking income of $0.2 million.

Other operating expense totaled $46.7 million for the third quarter of 2024, compared to $41.2 million in the previous quarter and $39.6 million in the year-ago quarter. The higher other operating expense was primarily due to the aforementioned $3.1 million in expenses related to a strategic opportunity (included in other), higher salaries and employee benefits of $1.1 million, and higher directors' deferred compensation plan expenses of $1.0 million (included in other).

The efficiency ratio was 70.12% for the third quarter of 2024, compared to 64.26% in the previous quarter and 63.91% in the year-ago quarter. Excluding the aforementioned expenses related to a strategic opportunity, the adjusted efficiency ratio (non-GAAP) for the third quarter of 2024 was 65.51%.

The effective tax rate was 22.0% for the third quarter of 2024, compared to 23.4% in the previous quarter and 24.9% in the year-ago quarter. The decrease in the effective tax rate was primarily due to higher tax-exempt income from bank-owned life insurance and additional tax credits recognized.

Balance Sheet Highlights
Total assets of $7.42 billion at September 30, 2024 increased by $28.5 million, or 0.4% from $7.39 billion at June 30, 2024, and decreased by $222.5 million, or 2.9% from $7.64 billion at September 30, 2023. The Company had $326.6 million in cash on its balance sheet and $2.55 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities at September 30, 2024. Total available sources of liquidity as a percentage of uninsured and uncollateralized deposits was 118% at September 30, 2024, compared to 121% at June 30, 2024 and 122% at September 30, 2023. During the third quarter of 2024, excess balance sheet liquidity was used to pay off $69.1 million in higher cost government time deposits.

Total loans, net of deferred fees and costs, of $5.34 billion at September 30, 2024 decreased by $41.0 million, or 0.8% from $5.38 billion at June 30, 2024, and decreased by $166.1 million, or 3.0% from $5.51 billion at September 30, 2023. Average yields earned on loans during the third quarter of 2024 was 4.89%, compared to 4.80% in the previous quarter and 4.49% in the year-ago quarter.

Total deposits of $6.58 billion at September 30, 2024 increased by $0.6 million or 0.01% from $6.58 billion at June 30, 2024, and decreased by $291.7 million, or 4.2% from $6.87 billion at September 30, 2023. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.97 billion at September 30, 2024, and increased by $53.9 million, or 0.9% from $5.91 billion at June 30, 2024. Average rates paid on total deposits during the third quarter of 2024 was 1.32%, compared to 1.33% in the previous quarter and 1.07% in the year-ago quarter. FDIC-insured or fully collateralized deposits represented approximately 63% of total deposits at September 30, 2024, compared to 64% at June 30, 2024 and 65% at September 30, 2023.

Asset Quality
Nonperforming assets totaled $11.6 million, or 0.16% of total assets at September 30, 2024, compared to $10.3 million, or 0.14% of total assets at June 30, 2024 and $6.7 million, or 0.09% of total assets at September 30, 2023. The increase in nonperforming assets was primarily due to the addition of residential mortgage loans totaling $2.2 million which were well-collateralized with strong loan-to-value ratios.

Net charge-offs totaled $3.6 million in the third quarter of 2024, compared to net charge-offs of $3.8 million in the previous quarter, and net charge-offs of $3.9 million in the year-ago quarter. Annualized net charge-offs as a percentage of average loans was 0.27%, 0.28% and 0.28% during the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.


Central Pacific Financial Reports Third Quarter 2024 Earnings
Page 3


The allowance for credit losses, as a percentage of total loans was 1.15% at September 30, 2024, compared to 1.16% at June 30, 2024, and 1.17% at September 30, 2023.

Capital
Total shareholders' equity was $543.7 million at September 30, 2024, compared to $518.6 million and $468.6 million at June 30, 2024 and September 30, 2023, respectively.

During the third quarter of 2024, the Company did not repurchase any shares of common stock. As of September 30, 2024, $19.1 million in share repurchase authorization remained available under the Company's share repurchase program.

The Company's leverage, common equity tier 1, tier 1 risk-based capital, and total risk-based capital ratios were 9.5%, 12.1%, 13.1%, and 15.3%, respectively, at September 30, 2024, compared to 9.3%, 11.9%, 12.8%, and 15.1%, respectively, at June 30, 2024.

On October 29, 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 December 16, 2024 to shareholders of record at the close of business on November 29, 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 (conference ID: 6299769). A playback of the call will be available through November 29, 2024 by dialing 1-800-770-2030 (playback ID: 6299769) 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 $7.42 billion in assets as of September 30, 2024. Central Pacific Bank, its primary subsidiary, operates 27 branches and 56 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 2024 Earnings
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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; labor contract disputes and potential strikes; 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 PCAOB, the FASB 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 LIBOR Index; negative trends in our market capitalization and adverse changes in the price of the Company's common stock; the effects of any potential or actual acquisitions or dispositions we may make or evaluate, and the related costs, including re-engagement in any potential acquisition process; 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 BaaS 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 SEC 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)2024202420242023202320242023
CONDENSED INCOME STATEMENT     
Net interest income$53,851 $51,921 $50,187 $51,142 $51,928 $155,959 $158,858 
Provision for credit losses 2,833 2,239 3,936 4,653 4,874 9,008 11,045 
Total other operating income12,734 12,121 11,244 15,172 10,047 36,099 31,491 
Total other operating expense 46,687 41,151 40,576 42,522 39,611 128,414 121,621 
Income tax expense3,760 4,835 3,974 4,273 4,349 12,569 13,880 
Net income13,305 15,817 12,945 14,866 13,141 42,067 43,803 
Basic earnings per share$0.49 $0.58 $0.48 $0.55 $0.49 $1.55 $1.62 
Diluted earnings per share0.49 0.58 0.48 0.55 0.49 1.55 1.62 
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]0.72 %0.86 %0.70 %0.79 %0.70 %0.76 %0.78 %
Return on average shareholders’ equity (ROE) [1]10.02 12.42 10.33 12.55 10.95 10.91 12.33 
Average shareholders’ equity to average assets7.23 6.94 6.73 6.32 6.39 6.97 6.34 
Efficiency ratio [2]70.12 64.26 66.05 64.12 63.91 66.86 63.89 
Net interest margin (NIM) [1]3.07 2.97 2.83 2.84 2.88 2.95 2.98 
Dividend payout ratio [3]53.06 44.83 54.17 47.27 53.06 50.32 48.15 
SELECTED AVERAGE BALANCES       
Average loans, including loans held for sale$5,330,810 $5,385,829 $5,400,558 $5,458,245 $5,507,248 $5,372,247 $5,525,476 
Average interest-earning assets7,022,910 7,032,515 7,140,264 7,208,613 7,199,866 7,065,075 7,156,270 
Average assets7,347,403 7,338,714 7,449,661 7,498,097 7,510,537 7,378,479 7,472,890 
Average deposits6,535,422 6,542,767 6,659,812 6,730,883 6,738,071 6,579,174 6,689,762 
Average interest-bearing liabilities4,904,460 4,910,998 5,009,542 5,023,321 4,999,820 4,941,530 4,910,190 
Average shareholders’ equity530,928 509,507 501,120 473,708 480,118 513,914 473,856 
[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,
20242024202420232023
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp.
Leverage ratio9.5 %9.3 %9.0 %8.8 %8.7 %
Common equity tier 1 capital ratio12.1 11.9 11.6 11.4 11.0 
Tier 1 risk-based capital ratio13.1 12.8 12.6 12.4 11.9 
Total risk-based capital ratio15.3 15.1 14.8 14.6 14.1 
Central Pacific Bank
Leverage ratio9.8 9.6 9.4 9.2 9.1 
Common equity tier 1 capital ratio13.6 13.3 13.1 12.9 12.4 
Tier 1 risk-based capital ratio13.6 13.3 13.1 12.9 12.4 
Total risk-based capital ratio14.8 14.5 14.3 14.1 13.7 


Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
(dollars in thousands, except for per share amounts)20242024202420232023
BALANCE SHEET   
Total loans, net of deferred fees and costs$5,342,609 $5,383,644 $5,401,417 $5,438,982 $5,508,710 
Total assets7,415,430 7,386,952 7,409,999 7,642,796 7,637,924 
Total deposits6,583,013 6,582,455 6,618,854 6,847,592 6,874,745 
Long-term debt156,284 156,223 156,163 156,102 156,041 
Total shareholders’ equity543,725 518,647 507,203 503,815 468,598 
Total shareholders’ equity to total assets7.33 %7.02 %6.84 %6.59 %6.14 %
ASSET QUALITY     
Allowance for credit losses (ACL)$61,647 $62,225 $63,532 $63,934 $64,517 
Nonaccrual loans11,597 10,257 10,132 7,008 6,652 
Non-performing assets (NPA)11,597 10,257 10,132 7,008 6,652 
Ratio of ACL to total loans1.15 %1.16 %1.18 %1.18 %1.17 %
Ratio of NPA to total assets0.16 %0.14 %0.14 %0.09 %0.09 %
PER SHARE OF COMMON STOCK OUTSTANDING     
Book value per common share$20.09 $19.16 $18.76 $18.63 $17.33 
Closing market price per common share29.51 21.20 19.75 19.68 16.68 



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)20242024202420232023
ASSETS   
Cash and due from financial institutions$100,064 $103,829 $98,410 $116,181 $108,818 
Interest-bearing deposits in other financial institutions226,505 195,062 214,472 406,256 329,913 
Investment securities:  
Available-for-sale debt securities, at fair value723,453 676,719 660,833 647,210 625,253 
Held-to-maturity debt securities, at amortized cost; fair value of: $546,990 at September 30, 2024, $528,088 at June 30, 2024, $541,685 at March 31, 2024, $565,178 at December 31, 2023, and $531,887 at September 30, 2023606,117 615,867 624,948 632,338 640,053 
Total investment securities1,329,570 1,292,586 1,285,781 1,279,548 1,265,306 
Loans held for sale1,609 3,950 755 1,778 — 
Loans, net of deferred fees and costs5,342,609 5,383,644 5,401,417 5,438,982 5,508,710 
Less: allowance for credit losses(61,647)(62,225)(63,532)(63,934)(64,517)
Loans, net of allowance for credit losses5,280,962 5,321,419 5,337,885 5,375,048 5,444,193 
Premises and equipment, net104,575 100,646 97,688 96,184 97,378 
Accrued interest receivable23,942 23,184 21,957 21,511 21,529 
Investment in unconsolidated entities54,836 40,155 40,780 41,546 42,523 
Mortgage servicing rights8,513 8,636 8,599 8,696 8,797 
Bank-owned life insurance175,914 173,716 172,228 170,706 168,543 
Federal Home Loan Bank of Des Moines ("FHLB") stock6,929 6,925 6,921 6,793 10,995 
Right-of-use lease assets32,192 32,081 32,079 29,720 32,294 
Other assets69,819 84,763 92,444 88,829 107,635 
Total assets$7,415,430 $7,386,952 $7,409,999 $7,642,796 $7,637,924 
LIABILITIES     
Deposits:     
Noninterest-bearing demand$1,838,009 $1,847,173 $1,848,554 $1,913,379 $1,969,523 
Interest-bearing demand1,255,382 1,283,669 1,290,321 1,329,189 1,345,843 
Savings and money market2,336,323 2,234,111 2,211,966 2,209,733 2,209,550 
Time1,153,299 1,217,502 1,268,013 1,395,291 1,349,829 
Total deposits6,583,013 6,582,455 6,618,854 6,847,592 6,874,745 
Long-term debt, net of unamortized debt issuance costs of: $263 at September 30, 2024, $324 at June 30, 2024, $384 at March 31, 2024, $445 at December 31, 2023, and $506 at September 30, 2023156,284 156,223 156,163 156,102 156,041 
Lease liabilities33,807 33,422 33,169 30,634 33,186 
Accrued interest payable12,980 14,998 16,654 18,948 16,752 
Other liabilities85,621 81,207 77,956 85,705 88,602 
Total liabilities6,871,705 6,868,305 6,902,796 7,138,981 7,169,326 
EQUITY
Shareholders' equity:     
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023— — — — — 
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,064,501 at September 30, 2024, 27,063,644 at June 30, 2024, 27,042,326 at March 31, 2024, 27,045,033 at December 31, 2023, and 27,043,169 at September 30, 2023404,494 404,494 404,494 405,439 405,439 
Additional paid-in capital104,794 104,161 103,130 102,982 102,550 
Retained earnings138,951 132,683 123,902 117,990 110,156 
Accumulated other comprehensive loss(104,514)(122,691)(124,323)(122,596)(149,547)
Total shareholders' equity543,725 518,647 507,203 503,815 468,598 
Total liabilities and equity$7,415,430 $7,386,952 $7,409,999 $7,642,796 $7,637,924 



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)2024202420242023202320242023
Interest income:     
Interest and fees on loans$65,469 $64,422 $62,819 $62,429 $62,162 $192,710 $180,886 
Interest and dividends on investment securities:
Taxable investment securities8,975 8,466 7,211 7,292 7,016 24,652 21,497 
Tax-exempt investment securities551 598 655 686 709 1,804 2,226 
Interest on deposits in other financial institutions2,775 2,203 3,611 3,597 2,412 8,589 3,566 
Dividend income on FHLB stock127 151 106 109 113 384 369 
Total interest income77,897 75,840 74,402 74,113 72,412 228,139 208,544 
Interest expense:       
Interest on deposits:       
Interest-bearing demand484 490 499 467 460 1,473 1,234 
Savings and money market10,235 8,977 8,443 7,459 6,464 27,655 14,520 
Time11,040 12,173 12,990 12,741 11,268 36,203 26,464 
Interest on short-term borrowings— 1 — — — 1 1,139 
Interest on long-term debt2,287 2,278 2,283 2,304 2,292 6,848 6,329 
Total interest expense24,046 23,919 24,215 22,971 20,484 72,180 49,686 
Net interest income53,851 51,921 50,187 51,142 51,928 155,959 158,858 
Provision for credit losses2,833 2,239 3,936 4,653 4,874 9,008 11,045 
Net interest income after provision for credit losses51,018 49,682 46,251 46,489 47,054 146,951 147,813 
Other operating income:       
Mortgage banking income822 1,040 613 611 765 2,475 1,981 
Service charges on deposit accounts2,167 2,135 2,103 2,312 2,193 6,405 6,441 
Other service charges and fees5,947 5,869 5,261 5,349 5,203 17,077 15,182 
Income from fiduciary activities1,447 1,449 1,435 1,272 1,234 4,331 3,623 
Income from bank-owned life insurance1,897 1,234 1,522 2,015 379 4,653 2,855 
Net loss on sales of investment securities— — — (1,939)(135)— (135)
Other454 394 310 5,552 408 1,158 1,544 
Total other operating income12,734 12,121 11,244 15,172 10,047 36,099 31,491 
Other operating expense:       
Salaries and employee benefits22,299 21,246 20,735 20,164 19,015 64,280 61,886 
Net occupancy4,612 4,597 4,600 4,676 4,725 13,809 13,509 
Computer software4,590 4,381 4,287 4,026 4,473 13,258 13,700 
Legal and professional services2,460 2,506 2,320 2,245 2,359 7,286 7,714 
Equipment972 995 1,010 968 1,112 2,977 2,990 
Advertising889 901 914 1,045 968 2,704 2,843 
Communication740 657 837 632 809 2,234 2,378 
Other10,125 5,868 5,873 8,766 6,150 21,866 16,601 
Total other operating expense46,687 41,151 40,576 42,522 39,611 128,414 121,621 
Income before income taxes17,065 20,652 16,919 19,139 17,490 54,636 57,683 
Income tax expense3,760 4,835 3,974 4,273 4,349 12,569 13,880 
Net income$13,305 $15,817 $12,945 $14,866 $13,141 $42,067 $43,803 
Per common share data:       
Basic earnings per share$0.49 $0.58 $0.48 $0.55 $0.49 $1.55 $1.62 
Diluted earnings per share0.49 0.58 0.48 0.55 0.49 1.55 1.62 
Cash dividends declared0.26 0.26 0.26 0.26 0.26 0.78 0.78 
Basic weighted average shares outstanding27,064,035 27,053,549 27,046,525 27,044,121 27,042,762 27,054,737 27,022,141 
Diluted weighted average shares outstanding27,194,625 27,116,349 27,099,101 27,097,285 27,079,484 27,137,985 27,081,541 



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, 2024June 30, 2024September 30, 2023
 AverageAverage AverageAverage AverageAverage 
(Dollars in thousands)BalanceYield/RateInterestBalanceYield/RateInterestBalanceYield/RateInterest
ASSETS
Interest-earning assets:         
Interest-bearing deposits in other financial institutions$203,657 5.42 %$2,775 $162,393 5.46 %$2,203 $177,780 5.38 %$2,412 
Investment securities:
Taxable1,340,347 2.68 8,975 1,335,100 2.54 8,466 1,354,039 2.07 7,016 
Tax-exempt [1]141,168 1.98 697 142,268 2.13 757 149,824 2.40 897 
Total investment securities1,481,515 2.61 9,672 1,477,368 2.50 9,223 1,503,863 2.10 7,913 
Loans, including loans held for sale5,330,810 4.89 65,469 5,385,829 4.80 64,422 5,507,248 4.49 62,162 
FHLB stock6,928 7.31 127 6,925 8.71 151 10,975 4.09 113 
Total interest-earning assets7,022,910 4.43 78,043 7,032,515 4.34 75,999 7,199,866 4.01 72,600 
Noninterest-earning assets324,493   306,199   310,671   
Total assets$7,347,403   $7,338,714   $7,510,537   
LIABILITIES AND EQUITY
Interest-bearing liabilities:        
Interest-bearing demand deposits$1,267,135 0.15 %$484 $1,273,901 0.15 %$490 $1,339,294 0.14 %$460 
Savings and money market deposits2,298,853 1.77 10,235 2,221,754 1.63 8,977 2,209,835 1.16 6,464 
Time deposits up to $250,000534,497 3.15 4,238 555,809 3.29 4,548 449,844 2.33 2,637 
Time deposits over $250,000647,728 4.18 6,802 703,280 4.36 7,625 844,842 4.05 8,631 
Total interest-bearing deposits4,748,213 1.82 21,759 4,754,744 1.83 21,640 4,843,815 1.49 18,192 
FHLB advances and other short-term borrowings— — — 66 5.60 1 — — — 
Long-term debt156,247 5.82 2,287 156,188 5.86 2,278 156,005 5.83 2,292 
Total interest-bearing liabilities4,904,460 1.95 24,046 4,910,998 1.96 23,919 4,999,820 1.63 20,484 
Noninterest-bearing deposits1,787,209   1,788,023   1,894,256   
Other liabilities124,806   130,186   136,343   
Total liabilities6,816,475   6,829,207   7,030,419   
Total equity530,928   509,507   480,118   
Total liabilities and equity$7,347,403   $7,338,714   $7,510,537   
Net interest income  $53,997   $52,080   $52,116 
Interest rate spread2.48 %2.38 %2.38 %
Net interest margin 3.07 %  2.97 %  2.88 % 
[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, 2024September 30, 2023
 AverageAverage AverageAverage 
(Dollars in thousands)BalanceYield/RateInterestBalanceYield/RateInterest
ASSETS
Interest-earning assets:      
Interest-bearing deposits in other financial institutions$210,464 5.45 %$8,589 $91,202 5.23 %$3,566 
Investment securities:
Taxable1,333,394 2.47 24,652 1,376,294 2.08 21,497 
Tax-exempt [1]142,085 2.14 2,284 151,611 2.48 2,818 
Total investment securities1,475,479 2.43 26,936 1,527,905 2.12 24,315 
Loans, including loans held for sale5,372,247 4.79 192,710 5,525,476 4.37 180,886 
FHLB stock6,885 7.43 384 11,687 4.21 369 
Total interest-earning assets7,065,075 4.32 228,619 7,156,270 3.90 209,136 
Noninterest-earning assets313,404   316,620   
Total assets$7,378,479   $7,472,890   
LIABILITIES AND EQUITY
Interest-bearing liabilities:      
Interest-bearing demand deposits$1,279,256 0.15 %$1,473 $1,373,831 0.12 %$1,234 
Savings and money market deposits2,246,478 1.64 27,655 2,188,585 0.89 14,520 
Time deposits up to $250,000544,823 3.22 13,125 394,464 1.88 5,544 
Time deposits over $250,000714,763 4.31 23,078 775,615 3.61 20,920 
Total interest-bearing deposits4,785,320 1.82 65,331 4,732,495 1.19 42,218 
FHLB advances and other short-term borrowings22 5.60 1 31,182 4.88 1,139 
Long-term debt156,188 5.86 6,848 146,513 5.78 6,329 
Total interest-bearing liabilities4,941,530 1.95 72,180 4,910,190 1.35 49,686 
Noninterest-bearing deposits1,793,854   1,957,267   
Other liabilities129,181   131,577   
Total liabilities6,864,565   6,999,034   
Total equity513,914   473,856   
Total liabilities and equity$7,378,479   $7,472,890   
Net interest income  $156,439   $159,450 
Interest rate spread2.37 %2.55 %
Net interest margin 2.95 %  2.98 % 
[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)20242024202420232023
HAWAII:     
Commercial and industrial$411,209 $415,538 $420,009 $421,736 $406,433 
Real estate:
Construction134,043 147,657 145,213 163,337 174,057 
Residential mortgage1,897,919 1,913,177 1,924,889 1,927,789 1,930,740 
Home equity697,123 706,811 729,210 736,524 753,980 
Commercial mortgage1,157,625 1,150,703 1,103,174 1,063,969 1,045,625 
Consumer277,849 287,295 306,563 322,346 338,248 
Total loans, net of deferred fees and costs4,575,768 4,621,181 4,629,058 4,635,701 4,649,083 
Less: Allowance for credit losses(47,789)(47,902)(48,739)(48,189)(48,105)
Loans, net of allowance for credit losses$4,527,979 $4,573,279 $4,580,319 $4,587,512 $4,600,978 
U.S. MAINLAND: [1]     
Commercial and industrial$188,238 $169,318 $156,087 $153,971 $157,373 
Real estate:
Construction24,083 23,865 23,356 22,182 37,455 
Commercial mortgage312,685 314,667 319,088 318,933 319,802 
Consumer241,835 254,613 273,828 308,195 344,997 
Total loans, net of deferred fees and costs766,841 762,463 772,359 803,281 859,627 
Less: Allowance for credit losses(13,858)(14,323)(14,793)(15,745)(16,412)
Loans, net of allowance for credit losses$752,983 $748,140 $757,566 $787,536 $843,215 
TOTAL:     
Commercial and industrial$599,447 $584,856 $576,096 $575,707 $563,806 
Real estate:
Construction158,126 171,522 168,569 185,519 211,512 
Residential mortgage1,897,919 1,913,177 1,924,889 1,927,789 1,930,740 
Home equity697,123 706,811 729,210 736,524 753,980 
Commercial mortgage1,470,310 1,465,370 1,422,262 1,382,902 1,365,427 
Consumer519,684 541,908 580,391 630,541 683,245 
Total loans, net of deferred fees and costs5,342,609 5,383,644 5,401,417 5,438,982 5,508,710 
Less: Allowance for credit losses(61,647)(62,225)(63,532)(63,934)(64,517)
Loans, net of allowance for credit losses$5,280,962 $5,321,419 $5,337,885 $5,375,048 $5,444,193 
[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)20242024202420232023
Noninterest-bearing demand$1,838,009 $1,847,173 $1,848,554 $1,913,379 $1,969,523 
Interest-bearing demand1,255,382 1,283,669 1,290,321 1,329,189 1,345,843 
Savings and money market2,336,323 2,234,111 2,211,966 2,209,733 2,209,550 
Time deposits up to $250,000536,316 547,212 544,600 533,898 465,543 
Core deposits5,966,030 5,912,165 5,895,441 5,986,199 5,990,459 
Other time deposits greater than $250,000492,221 476,457 487,950 486,812 484,156 
Government time deposits124,762 193,833 235,463 374,581 400,130 
Total time deposits greater than $250,000616,983 670,290 723,413 861,393 884,286 
Total deposits$6,583,013 $6,582,455 $6,618,854 $6,847,592 $6,874,745 



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)20242024202420232023
Nonaccrual loans:
Commercial and industrial$376 $355 $357 $432 $352 
Real estate:
Residential mortgage9,680 7,991 7,979 4,962 4,949 
Home equity915 1,247 929 834 677 
Commercial mortgage— 77 77 77 77 
Consumer626 587 790 703 597 
Total nonaccrual loans11,597 10,257 10,132 7,008 6,652 
Other real estate owned ("OREO")— — — — — 
Total nonperforming assets ("NPAs")11,597 10,257 10,132 7,008 6,652 
Accruing loans 90+ days past due:     
Real estate:  
Construction— — 588 — — 
Residential mortgage13 1,273 386 — 794 
Home equity135 135 560 229 — 
Consumer481 896 924 1,083 2,120 
Total accruing loans 90+ days past due629 2,304 2,458 1,312 2,914 
Total NPAs and accruing loans 90+ days past due$12,226 $12,561 $12,590 $8,320 $9,566 
Ratio of total nonaccrual loans to total loans0.22 %0.19 %0.19 %0.13 %0.12 %
Ratio of total NPAs to total assets0.16 0.14 0.14 0.09 0.09 
Ratio of total NPAs to total loans and OREO0.22 0.19 0.19 0.13 0.12 
Ratio of total NPAs and accruing loans 90+ days past due to total loans and OREO0.23 0.23 0.23 0.15 0.17 
Quarter-to-quarter changes in NPAs:    
Balance at beginning of quarter$10,257 $10,132 $7,008 $6,652 $11,061 
Additions3,484 1,920 4,792 1,836 2,311 
Reductions:  
Payments(602)(363)(263)(268)(5,718)
Return to accrual status(354)(27)(198)(137)(207)
Charge-offs, valuation and other adjustments(1,188)(1,405)(1,207)(1,075)(795)
Total reductions(2,144)(1,795)(1,668)(1,480)(6,720)
Balance at end of quarter$11,597 $10,257 $10,132 $7,008 $6,652 



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)2024202420242023202320242023
Allowance for credit losses:     
Balance at beginning of period$62,225 $63,532 $63,934 $64,517 $63,849 $63,934 $63,738 
Provision for credit losses on loans3,040 2,448 4,121 4,959 4,526 9,609 10,276 
Charge-offs: 
Commercial and industrial(663)(519)(682)(419)(402)(1,864)(1,543)
Real estate:
Residential mortgage(99)(284)— — — (383)— 
Consumer(3,956)(4,345)(4,838)(5,976)(4,710)(13,139)(11,269)
Total charge-offs(4,718)(5,148)(5,520)(6,395)(5,112)(15,386)(12,812)
Recoveries:     
Commercial and industrial158 130 90 84 261 378 636 
Real estate:
Construction— — — — 1 — 1 
Residential mortgage8 9 8 7 10 25 70 
Home equity— — 6 42 — 6 15 
Consumer934 1,254 893 720 982 3,081 2,593 
Total recoveries1,100 1,393 997 853 1,254 3,490 3,315 
Net charge-offs
(3,618)(3,755)(4,523)(5,542)(3,858)(11,896)(9,497)
Balance at end of period$61,647 $62,225 $63,532 $63,934 $64,517 $61,647 $64,517 
Average loans, net of deferred fees and costs$5,330,810 $5,385,829 $5,400,558 $5,458,245 $5,507,248 $5,372,247 $5,525,476 
Ratio of annualized net charge-offs to average loans0.27 %0.28 %0.34 %0.41 %0.28 %0.30 %0.23 %
Ratio of ACL to total loans1.15 1.16 1.18 1.18 1.17 1.15 %1.17 %



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 which we believe are better indicators of the Company's core activities. 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 following reconciling adjustments from GAAP or reported financial measures to non-GAAP adjusted financial measures are limited to the $3.1 million in pre-tax expenses related to our evaluation and assessment of a strategic opportunity. Management does not consider these expenses to be representative of the Company's core earnings.

Three Months Ended September 30, 2024Nine Months Ended September 30, 2024
(dollars in thousands, Non-GAAPNon-GAAP
except per share data)ReportedAdjustmentAdjustedReportedAdjustmentAdjusted
Financial measures:
Net income$13,305 $2,362 $15,667 $42,067 $2,362 $44,429 
Diluted earnings per share ("EPS")$0.49 $0.09 $0.58 $1.55 $0.09 $1.64 
Pre-provision net revenue (non-GAAP)$19,898 $3,068 $22,966 $63,644 $3,068 $66,712 
Efficiency ratio (non-GAAP)70.12 %(4.61)%65.51 %66.86 %(1.60)%65.26 %
Return on average assets ("ROA")0.72 %0.13 %0.85 %0.76 %0.04 %0.80 %
Return on average shareholders' equity ("ROE")10.02 %1.73 %11.75 %10.91 %0.60 %11.51 %
As of September 30, 2024:
Tangible common equity ratio (non-GAAP)7.31 %0.03 %7.34 %

The following tables present a recalculation of the non-GAAP financial measures presented above.

Three Months EndedNine Months Ended
(dollars in thousands, except per share data)September 30, 2024September 30, 2024
GAAP net income$13,305 $42,067 
Add: Pre-tax expenses related to a strategic opportunity3,068 3,068 
Less: Income tax effect (assumes 23% ETR)(706)(706)
Expenses related to a strategic opportunity, net of tax2,362 2,362 
Adjusted net income (non-GAAP)$15,667 $44,429 
Diluted weighted average shares outstanding27,194,625 27,137,985 
GAAP EPS$0.49 $1.55 
Add: Expenses related to a strategic opportunity, net of tax0.09 0.09 
Adjusted EPS (non-GAAP)$0.58 $1.64 



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

Three Months EndedNine Months Ended
(dollars in thousands)September 30, 2024September 30, 2024
GAAP net income$13,305 $42,067 
Add: Income tax expense3,760 12,569 
GAAP pre-tax income17,065 54,636 
Add: Provision for credit losses2,833 9,008 
Pre-provision net revenue ("PPNR") (non-GAAP)19,898 63,644 
Add: Pre-tax expenses related to a strategic opportunity3,068 3,068 
Adjusted PPNR (non-GAAP)$22,966 $66,712 
Three Months EndedNine Months Ended
(dollars in thousands)September 30, 2024September 30, 2024
Total other operating expense$46,687 $128,414 
Less: Expenses related to a strategic opportunity(3,068)(3,068)
Adjusted total other operating expense (non-GAAP)$43,619 $125,346 
Net interest income$53,851 $155,959 
Total other operating income12,734 36,099 
Total revenue$66,585 $192,058 
Efficiency ratio (non-GAAP)70.12 %66.86 %
Less: Expenses related to a strategic opportunity(4.61)%(1.60)%
Adjusted efficiency ratio (non-GAAP)65.51 %65.26 %
Three Months EndedNine Months Ended
(dollars in thousands)September 30, 2024September 30, 2024
Average assets$7,347,403 $7,378,479 
Add: Expenses related to a strategic opportunity, net of tax2,362 787 
Adjusted average assets (non-GAAP)$7,349,765 $7,379,266 
ROA (GAAP net income divided by average assets)0.72 %0.76 %
Add: Expenses related to a strategic opportunity, net of tax0.13 0.04 
Adjusted ROA (non-GAAP)0.85 %0.80 %
Average shareholders' equity$530,928 $513,914 
Add: Expenses related to a strategic opportunity, net of tax2,362 787 
Adjusted average shareholders' equity (non-GAAP)$533,290 $514,701 
ROE (GAAP net income divided by average shareholders' equity)10.02 %10.91 %
Add: Expenses related to a strategic opportunity, net of tax1.73 0.60 
Adjusted ROE (non-GAAP)11.75 %11.51 %



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

(dollars in thousands)September 30, 2024
Total shareholders' equity$543,725 
Less: Intangible assets(1,390)
Tangible common equity ("TCE")542,335 
Add: Expenses related to a strategic opportunity, net of tax2,362 
Adjusted TCE (non-GAAP)$544,697 
Total assets$7,415,430 
Less: Intangible assets(1,390)
Tangible assets7,414,040 
Add: Expenses related to a strategic opportunity, net of tax2,362 
Adjusted tangible assets (non-GAAP)$7,416,402 
TCE ratio (non-GAAP) (TCE divided by tangible assets)7.31 %
Add: Expenses related to a strategic opportunity, net of tax0.03 
Adjusted TCE ratio (non-GAAP)7.34 %

3rd Quarter 2024 Earnings Supplement October 30, 2024

 
2Central Pacific Financial Corp. 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, 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," "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; labor contract disputes and potential strikes impacting both the U.S. National and Hawaii economies; 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 or evaluate, and the costs associated with any potential or actual acquisition or disposition, including re-engagement in any potential acquisition process; 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.

 
3Central Pacific Financial Corp. 3rd Quarter 2024 Financial Highlights • Net income of $13.3MM compared to $15.8MM prior quarter • Net income impacted by $3.1 MM in pre-tax expenses related to a strategic opportunity. Excluding these costs, adjusted net income was $15.7MM • NIM expanded 10 bps sequential quarter • Core deposits grew $53.9MM from prior quarter • TCE ratio improved to 7.31% • Quarterly cash dividend maintained at $0.26 3Q24 Actual 3Q24 Non-GAAP 2Q24 Actual NET INCOME / DILUTED EPS $13.3MM / $0.49 $15.7MM / $0.58 $15.8MM / $0.58 PRE-PROVISION NET REVENUE (PPNR) $19.9MM $23.0MM $22.9MM RETURN ON ASSETS (ROA) 0.72% 0.85% 0.86% RETURN ON EQUITY (ROE) 10.02% 11.75% 12.42% TANGIBLE COMMON EQUITY (TCE) 7.31% 7.34% 7.00% NET INTEREST MARGIN (NIM) 3.07% 3.07% 2.97% * Excludes $3.1MM in expenses related to a strategic opportunity. Refer to non-GAAP table in the Appendix. *

 
4Central Pacific Financial Corp. Tourism YTD Visitor arrivals compared to pre-pandemic 92% 1 Employment Unemployment Rate September 2024 2.9% 1 FACTORS FOR A FAVORABLE HAWAII OUTLOOK • Maui tourism recovery from Maui wildfires in August 2023 continues with August 2024 year-to-date visitor arrivals at ~83% of the previous year • Japanese visitor return slowly improving, with counts up 38% from a year ago, yet still at ~45% of pre-pandemic levels • Low unemployment and strong real estate market • Substantial Federal government contracts and military investments • Increase in public and private investments to address housing shortage • 50% increase in residential units authorized YoY and $1.6 billion planned for Transit Oriented Development 1 Source: Hawaii Department of Business, Economic Development & Tourism. Tourism represents total visitors YTD August 2024 compared to YTD August 2019. 2 Source: Honolulu Board of Realtors. Resilient Hawaii Economy Housing Oahu Median Single- Family Home Price September 2024 $1.1MM 2 1

 
5Central Pacific Financial Corp. • Conservative growth approach in the current environment • Strong and diverse loan portfolio, with nearly 80% secured by real estate • Overall portfolio yield improved 9 bps to 4.89% in the 3Q24 Diversified Loan Portfolio2 1.22 1.34 1.43 1.60 1.69 1.88 1.94 1.93 1.92 1.91 1.90 0.88 0.98 1.04 1.12 1.16 1.22 1.36 1.38 1.42 1.47 1.47 0.36 0.41 0.47 0.49 0.55 0.64 0.74 0.74 0.73 0.71 0.70 0.45 0.47 0.49 0.57 0.48 0.62 0.80 0.63 0.58 0.54 0.52 0.51 0.50 0.58 0.57 0.96 0.62 0.55 0.57 0.58 0.58 0.59 0.10 0.07 0.07 0.10 0.12 0.12 0.17 0.19 0.17 0.17 0.16 3.52 3.77 4.08 4.45 4.96 5.10 5.56 5.44 5.40 5.38 5.34 - 1.00 2.00 3.00 4.00 5.00 6.00 2016 2017 2018 2019 2020 2021 2022 2023 1Q24 2Q24 3Q24 $ Bi lli on s Loan Portfolio Composition Residential Mortgage Commercial Mortgage Home Equity Consumer Commercial & Industrial Construction

 
6Central Pacific Financial Corp. Relationship Deposits – Diversified & Granular • 58% of deposits FDIC insured; 63% including collateralized deposits • 56% Commercial (Average account balance of $104,000) / 44% Consumer (Average account balance of $19,000) • 52% Long-tenured customers with CPB 10 years or longer • No brokered deposits 1.39 1.48 1.45 1.60 1.93 2.23 2.20 2.21 2.21 2.23 2.34 1.27 1.40 1.44 1.45 1.79 2.29 2.09 1.91 1.85 1.85 1.84 0.86 0.93 0.95 1.04 1.18 1.42 1.46 1.33 1.29 1.28 1.26 0.39 0.46 0.48 0.50 0.40 0.49 0.70 1.02 1.03 1.03 1.04 0.70 0.69 0.63 0.53 0.50 0.21 0.29 0.38 0.24 0.19 0.12 4.61 4.96 4.95 5.12 5.80 6.64 6.74 6.85 6.62 6.58 6.58 - 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 2016 2017 2018 2019 2020 2021 2022 2023 1Q24 2Q24 3Q24 $ Bi lli on s Deposit Portfolio Composition Savings and Money Market Noninterest-Bearing Demand Interest-Bearing Demand Time Deposits excluding Government Government Time Deposits Total Deposits Note: Totals may not sum due to rounding.

 
7Central Pacific Financial Corp. 1.32% 1.76% 2.35% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q24 2Q24 3Q24 Total Deposit Cost CPF HI Peers Nat'l Peers • CPF shown as of 3Q24 • HI Peers includes BOH & FHB as of 2Q24. • Nat’l Peers includes publicly traded banks with total assets of $3-10B as of 2Q24. • Source: S&P Global. Low rate-sensitive, relationship-based deposit portfolio provides significant cost advantage Implied Repricing Beta in Current Cycle: CPF 24% HI Peers 32% Nat’l Peers 40% 1.82% 2.52% 3.03% CPF HI Peers Nat'l Peers Total Interest Bearing Deposit Cost 27.9% 30.0% 23.5% CPF HI Peers Nat'l Peers Non-Interest Bearing Deposits to Total Deposits CPF Deposit Cost Advantage

 
8Central Pacific Financial Corp. 5 STRONG CREDIT RISK MANAGEMENT CONTINUES TO DRIVE LOW LEVELS OF PROBLEM ASSETS Solid Credit Profile 0.05% 0.02% 0.05% 0.04% 0.01% 3Q23 4Q23 1Q24 2Q24 3Q24 Delinquencies 90+Days/Total Loans 0.12% 0.13% 0.19% 0.19% 0.22% 3Q23 4Q23 1Q24 2Q24 3Q24 NPAs/Total Loans 1.09% 0.92% 0.56% 0.66% 0.62% 3Q23 4Q23 1Q24 2Q24 3Q24 Criticized/Total Loans 0.05% 0.07% 0.10% 0.08% 0.07% 0.23% 0.34% 0.24% 0.20% 0.20% 0.28% 0.41% 0.34% 0.28% 0.27% 3Q23 4Q23 1Q24 2Q24 3Q24 Annualized NCO/Avg Loans All Other NCO/Avg Loans Mainland Consumer NCO/Avg Loans * NPA increase primarily due to residential mortgages which are well-collateralized with strong LTVs. *

 
9Central Pacific Financial Corp. • $3.0MM provision for credit loss on loans in 3Q24 driven by net charge-offs, offset by a credit of $0.2MM to the reserve for unfunded commitments, for a total provision for credit loss of $2.8MM • Strong ACL coverage ratio of 1.15% for 3Q24 Note: Totals may not sum due to rounding. Allowance for Credit Losses $ Millions 3Q23 4Q23 1Q24 2Q24 3Q24 Beginning Balance 63.8 64.5 63.9 63.5 62.2 Net Charge-offs (3.8) (5.6) (4.5) (3.7) (3.6) Provision for Credit Losses 4.5 5.0 4.1 2.4 3.0 Ending Balance 64.5 63.9 63.5 62.2 61.6 Coverage Ratio (ACL to Total Loans) 1.17% 1.18% 1.18% 1.16% 1.15%

 
10Central Pacific Financial Corp. High Quality Securities Portfolio • $1.3B or 18% of total assets • 92% AAA rated • Portfolio mix: AFS 54% / HTM 46% • $33.2MM in investment securities purchased in 3Q24 at weighted average yield of 4.48% • Interest rate swap on $115.5MM of municipal securities started on 3/31/24; added $1.1MM to interest income in 3Q24 (pay fixed at 2.1%, receive float at Fed Funds) U.S. Treasury & Gov't Agency 83% Municipals 12% Non-Agency CMBS/RMBS 2% Corporate 2% Other 1% Investment Portfolio Composition as of September 30, 2024

 
11Central Pacific Financial Corp. • Ample alternative sources of liquidity available • Available sources of liquidity total 118% of uninsured/uncollateralized deposits Available Sources of Liquidity $ Millions September 30, 2024 Cash on Balance Sheet 327$ Other Funding Sources: Unpledged Securities 513 FHLB Available Borrowing Capacity 1,720 FRB Available Borrowing Capacity 243 Other Funding Lines 75 Total 2,551$ Total Sources of Liquidity 2,878$ Uninsured/Uncollateralized Deposits 2,437$ % of Uninsured/Uncollateralized Deposits 118%

 
121Central Pacific Financial Corp. 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Tier 1 Leverage CET1 Total Capital Regulatory Capital Ratios As September 30, 2024 Regulatory Minimum Well-Capitalized CPF Solid Capital Position 9.5% $280MM capital cushion to well capitalized minimum 12.1% 15.3% STRONG CAPITAL AND SHAREHOLDER RETURN • TCE ratio of 7.3% and CET1 ratio of 12.1% both increasing with retained earnings • Maintained quarterly cash dividend at $0.26 per share which will be payable on December 16, 2024 • No shares repurchased in the 3Q24. $19.1MM remaining available authorization under the share repurchase program $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 2016 2017 2018 2019 2020 2021 2022 2023 2024 Cash Dividends Declared per Common Share * * Annualized

 
13Central Pacific Financial Corp. • Q3 2024 other operating expenses includes $3.1 million in non-recurring expenses related to a strategic opportunity, $1.1 in non-recurring directors/employee deferred compensation plan expenses and $0.5 in other non-recurring expenses • Q4 2023 other operating expenses includes $2.3 million in non-recurring branch lease termination expense and $0.8 million in non-recurring directors/employee deferred compensation plan expenses Other Operating Expenses2 39.6 39.4 40.6 41.2 42.0 - - - - 3.1 0.8 1.1 2.3 0.5 39.6 42.5 40.6 41.2 46.7 25.0 30.0 35.0 40.0 45.0 50.0 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Total Other Operating Expense (in millions) Recurring Strategic expenses Non-recurring deferred comp plan expenses Other non-recurring

 
14Central Pacific Financial Corp. Appendix

 
15Central Pacific Financial Corp. Non-GAAP Disclosure The Company uses certain non-GAAP financial measures in addition to our GAAP results to provide useful information which we believe are better indicators of the Company’s core activities. 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. The following reconciling adjustments from GAAP or reported financial measures to non-GAAP adjusted financial measures are limited to the $3.1 million in pre-tax expenses related to our evaluation and assessment of a strategic opportunity. Management does not consider these expenses to be representative of the Company's core earnings. 3Q24 Actual Adjustment 3Q24 Non-GAAP NET INCOME $13.3MM +$2.4MM $15.7MM DILUTED EARNINGS PER SHARE (EPS) $0.49 +$0.09 $0.58 PRE-PROVISION NET REVENUE (PPNR) $19.9MM +$3.1MM $23.0MM EFFICIENCY RATIO 70.12% -4.61% 65.51% RETURN ON ASSETS (ROA) 0.72% +0.13% 0.85% RETURN ON EQUITY (ROE) 10.02% +1.73% 11.75% TANGIBLE COMMON EQUITY (TCE) 7.31% +0.03% 7.34%

 
16Central Pacific Financial Corp. Commercial Real Estate Portfolio OFFICE RETAIL TOTAL BALANCE $198.4MM $290.5MM % OF TOTAL CRE 13% 20% % OF TOTAL LOANS 4% 5% WA LTV 57% 65% WA MONTHS TO MATURITY 69 65 INVESTOR / OWNER- OCCUPIED $128.5MM / $69.9MM $213.2MM / $77.3MM• Hawaii 79% / Mainland 21% • Investor 76% / Owner-Occupied 24% Industrial/Warehouse 27% Retail 20% Apartment 20% Office 13% Hotel 11% Other 4% Shopping Center 3% Storage 2% CRE Portfolio Composition as of September 30, 2024

 
17Central Pacific Financial Corp. • Total Hawaii Consumer $278MM • Total Mainland Consumer $242MM • Weighted average origination FICO: • 744 for Hawaii Consumer • 741 for Mainland Consumer • Consumer net charge-offs peaked in 4Q23 and declined for 3 consecutive quarters in 3Q24 thus far • Mainland Unsecured: Highly granular with average loan amounts of $12,000 Consumer Loan Portfolio HI Auto $151 , 29% HI Other $127 , 24% Mainland Home Improvement $99 , 19% Mainland Unsecured $55 , 11% Mainland Auto $88 , 17% Consumer Portfolio Composition as of September 30, 2024 ($ Millions)

 
18Central Pacific Financial Corp. CPB Named Best Bank in Hawaii by Newsweek, Forbes, and Honolulu Star-Advertiser • Newsweek’s Best In State Bank 2024 • Forbes’ Best-In-State Banks 2024 • Forbes’ America’s Best Banks 2024 • Honolulu Star-Advertiser’s Best Bank in Hawaii 2024

 
19Central Pacific Financial Corp. Environmental, Social & Governance (ESG) Focus 2023 ESG Report available here: https://www.cpb.bank/esg

 
20Central Pacific Financial Corp. Mahalo

 
v3.24.3
Cover Cover
Oct. 30, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 30, 2024
Entity Registrant Name Central Pacific Financial Corp
Entity Incorporation, State or Country Code HI
Entity File Number 001-31567
Entity Tax Identification Number 99-0212597
Entity Address, Address Line One 220 South King Street
Entity Address, City or Town Honolulu
Entity Address, State or Province HI
Entity Address, Postal Zip Code 96813
City Area Code 808
Local Phone Number 544-0500
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, No Par Value
Trading Symbol CPF
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000701347
Amendment Flag false
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