0000701347false00007013472024-07-312024-07-31

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):
July 31, 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 July 31, 2024, Central Pacific Financial Corp. (the "Company") issued a press release regarding its results of operations and financial condition for the quarter ended June 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 July 31, 2024, Central Pacific Financial Corp. will hold an investor conference call and webcast to discuss financial results for the quarter ended June 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 June 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:July 31, 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 SECOND QUARTER 2024 EARNINGS OF $15.8 MILLION

Highlights include:
•Net income of $15.8 million, or $0.58 per diluted share, an increase of 22.2% compared to the $12.9 million earned in the previous quarter
•Net interest margin of 2.97% increased by 14 bps from 2.83% in the previous quarter
•Total loans of $5.38 billion decreased by $17.8 million from the previous quarter
•Core deposits of $5.91 billion increased by $16.7 million from the previous quarter. Total deposits of $6.58 billion decreased by $36.4 million from the previous quarter, which included a decrease in government time deposits of $41.6 million.
•Net charge-offs of $3.8 million decreased by $0.8 million from the previous quarter
•Total risk-based capital and common equity tier 1 ratios of 15.1% and 11.9%, respectively
•The CPF Board of Directors approved a quarterly cash dividend of $0.26 per share

HONOLULU, HI, July 31, 2024 – Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $15.8 million, or fully diluted earnings per share ("EPS") of $0.58 for the second quarter of 2024, compared to net income of $12.9 million, or EPS of $0.48 in the previous quarter and net income of $14.5 million, or EPS of $0.53 in the year-ago quarter.

"We continue to navigate the current environment and positive trends are developing. We are pleased with our strong second quarter financial results, which included the highest net income in our last five quarters," said Arnold Martines, Chairman, President and Chief Executive Officer. "Key contributors included NIM expansion of 14 bps, core deposit growth and improvement in net charge-offs. At the same time, we maintained solid liquidity and grew our capital levels further."

"We were recently recognized by Forbes Magazine as one of America’s Best Banks as well as the Best-In-State Bank for Hawaii in 2024. We are humbled by this recognition, proud of our employees, and thankful to our customers for the trust they place in Central Pacific Bank," Martines said.

The Board of Directors has also appointed Mr. Martines as Chairman of the Board of the Company and the Bank. Mr. Martines replaces Ms. A. Catherine Ngo who continues to serve as a member of the Board of Directors of the Company and the Bank.



Central Pacific Financial Reports Second Quarter 2024 Earnings of $15.8 Million
Page 2

Earnings Highlights
Net interest income was $51.9 million for the second quarter of 2024, which increased by $1.7 million, or 3.5% from the previous quarter, and decreased by $0.8 million, or 1.5% from the year-ago quarter. Net interest margin ("NIM") was 2.97% for the second quarter of 2024, an increase of 14 basis points ("bp" or "bps") from the previous quarter and 1 bp from the year-ago quarter. The sequential quarter increase in net interest income and NIM was primarily due to higher average yields earned on investment securities and loans, while interest-bearing liability costs remained relatively stable. The higher average yield earned on investment securities includes $0.9 million in income from an interest rate swap that became effective on March 31, 2024.

The Company recorded a provision for credit losses of $2.2 million in the second quarter of 2024, compared to a provision of $3.9 million in the previous quarter and a provision of $4.3 million in the year-ago quarter. The provision in the second quarter consisted of a provision for credit losses on loans of $2.4 million and a credit to the provision for off-balance sheet exposures of $0.2 million.

Other operating income totaled $12.1 million for the second quarter of 2024, compared to $11.2 million in the previous quarter and $10.4 million in the year-ago quarter. The higher other operating income was primarily due to higher mortgage banking income of $0.4 million and higher investment services fees of $0.6 million (included in other service charges and fees).

Other operating expense totaled $41.2 million for the second quarter of 2024, compared to $40.6 million in the previous quarter and $39.9 million in the year-ago quarter. The higher other operating expense was primarily due to higher salaries and employee benefits.

The efficiency ratio was 64.26% for the second quarter of 2024, compared to 66.05% in the previous quarter and 63.17% in the year-ago quarter.

The effective tax rate was 23.4% for the second quarter of 2024, compared to 23.5% in the previous quarter and 23.6% in the year-ago quarter.

Balance Sheet Highlights
Total assets of $7.39 billion at June 30, 2024 decreased by $23.0 million, or 0.3% from $7.41 billion at March 31, 2024, and decreased by $180.6 million, or 2.4% from $7.57 billion at June 30, 2023. The Company had $298.9 million in cash on its balance sheet and $2.56 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities at June 30, 2024. Total available sources of liquidity as a percentage of uninsured and uncollateralized deposits was 121% at June 30, 2024, compared to 118% at March 31, 2024 and 128% at June 30, 2023. During the second quarter of 2024, excess balance sheet liquidity was used to pay off $41.6 million in higher cost government time deposits.

Total loans, net of deferred fees and costs, of $5.38 billion at June 30, 2024 decreased by $17.8 million, or 0.3% from $5.40 billion at March 31, 2024, and decreased by $137.0 million, or 2.5% from $5.52 billion at June 30, 2023. Average yields earned on loans during the second quarter of 2024 was 4.80%, compared to 4.67% in the previous quarter and 4.37% in the year-ago quarter.

Total deposits of $6.58 billion at June 30, 2024 decreased by $36.4 million or 0.5% from $6.62 billion at March 31, 2024, and decreased by $223.3 million, or 3.3% from $6.81 billion at June 30, 2023. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.91 billion at June 30, 2024, and increased by $16.7 million, or 0.3% from $5.90 billion at March 31, 2024. Average rates paid on total deposits during the second quarter of 2024 was 1.33%, compared to 1.32% in the previous quarter and 0.84% in the year-ago quarter. Approximately 64%, 65% and 65% of the Company's total deposits were FDIC-insured or fully collateralized at June 30, 2024, March 31, 2024 and June 30, 2023, respectively.

Asset Quality
Nonperforming assets totaled $10.3 million, or 0.14% of total assets at June 30, 2024, compared to $10.1 million, or 0.14% of total assets at March 31, 2024 and $11.1 million, or 0.15% of total assets at June 30, 2023.

Net charge-offs totaled $3.8 million in the second quarter of 2024, compared to net charge-offs of $4.5 million in the previous quarter, and net charge-offs of $3.4 million in the year-ago quarter. Annualized net charge-offs as a percentage of average loans was 0.28%, 0.34% and 0.24% during the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively.

The allowance for credit losses, as a percentage of total loans was 1.16% at June 30, 2024, compared to 1.18% at March 31, 2024, and 1.16% at June 30, 2023.



Central Pacific Financial Reports Second Quarter 2024 Earnings of $15.8 Million
Page 3

Capital
Total shareholders' equity was $518.6 million at June 30, 2024, compared to $507.2 million and $476.3 million at March 31, 2024 and June 30, 2023, respectively.

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

The Company's leverage, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 capital ratios were 9.3%, 12.8%, 15.1%, and 11.9%, respectively, at June 30, 2024, compared to 9.0%, 12.6%, 14.8%, and 11.6%, respectively, at March 31, 2024.

On July 30, 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 September 16, 2024 to shareholders of record at the close of business on August 30, 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: 9836028). A playback of the call will be available through August 30, 2024 by dialing 1-800-770-2030 (playback ID: 9836028) 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 $7.39 billion in assets as of June 30, 2024. Central Pacific Bank, its primary subsidiary, operates 27 branches and 55 ATMs in the State of Hawaii. For additional information, please visit the Company's website at http://www.cpb.bank.


fdic_equal-housingxlenderxa.jpg                                        nyselisteda28a.jpg
**********


Central Pacific Financial Reports Second Quarter 2024 Earnings of $15.8 Million
Page 4

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

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

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


CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights
(Unaudited)TABLE 1
 
 Three Months EndedSix Months Ended
(Dollars in thousands, Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,Jun 30,
except for per share amounts)2024202420232023202320242023
CONDENSED INCOME STATEMENT     
Net interest income$51,921 $50,187 $51,142 $51,928 $52,734 $102,108 $106,930 
Provision for credit losses 2,239 3,936 4,653 4,874 4,319 6,175 6,171 
Total other operating income12,121 11,244 15,172 10,047 10,435 23,365 21,444 
Total other operating expense 41,151 40,576 42,522 39,611 39,903 81,727 82,010 
Income tax expense4,835 3,974 4,273 4,349 4,472 8,809 9,531 
Net income15,817 12,945 14,866 13,141 14,475 28,762 30,662 
Basic earnings per share$0.58 $0.48 $0.55 $0.49 $0.54 $1.06 $1.14 
Diluted earnings per share0.58 0.48 0.55 0.49 0.53 1.06 1.13 
Dividends declared per share0.26 0.26 0.26 0.26 0.26 0.52 0.52 
PERFORMANCE RATIOS       
Return on average assets (ROA) [1]0.86 %0.70 %0.79 %0.70 %0.78 %0.78 %0.82 %
Return on average shareholders’ equity (ROE) [1]12.42 10.33 12.55 10.95 12.12 11.38 13.03 
Average shareholders’ equity to average assets6.94 6.73 6.32 6.39 6.40 6.83 6.31 
Efficiency ratio [2]64.26 66.05 64.12 63.91 63.17 65.14 63.88 
Net interest margin (NIM) [1]2.97 2.83 2.84 2.88 2.96 2.90 3.02 
Dividend payout ratio [3]44.83 54.17 47.27 53.06 49.06 49.06 46.02 
SELECTED AVERAGE BALANCES       
Average loans, including loans held for sale$5,385,829 $5,400,558 $5,458,245 $5,507,248 $5,543,398 $5,393,193 $5,534,741 
Average interest-earning assets7,032,515 7,140,264 7,208,613 7,199,866 7,155,606 7,086,389 7,134,111 
Average assets7,338,714 7,449,661 7,498,097 7,510,537 7,463,629 7,394,188 7,453,753 
Average deposits6,542,767 6,659,812 6,730,883 6,738,071 6,674,650 6,601,290 6,665,208 
Average interest-bearing liabilities4,910,998 5,009,542 5,023,321 4,999,820 4,908,120 4,960,270 4,864,633 
Average shareholders’ equity509,507 501,120 473,708 480,118 477,711 505,314 470,673 
[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)
 Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,
20242024202320232023
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp.
Leverage ratio9.3 %9.0 %8.8 %8.7 %8.7 %
Tier 1 risk-based capital ratio12.8 12.6 12.4 11.9 11.8 
Total risk-based capital ratio15.1 14.8 14.6 14.1 13.9 
Common equity tier 1 capital ratio11.9 11.6 11.4 11.0 10.9 
Central Pacific Bank
Leverage ratio9.6 9.4 9.2 9.1 9.1 
Tier 1 risk-based capital ratio13.3 13.1 12.9 12.4 12.3 
Total risk-based capital ratio14.5 14.3 14.1 13.7 13.5 
Common equity tier 1 capital ratio13.3 13.1 12.9 12.4 12.3 


Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,
(dollars in thousands, except for per share amounts)20242024202320232023
BALANCE SHEET   
Total loans, net of deferred fees and costs$5,383,644 $5,401,417 $5,438,982 $5,508,710 $5,520,683 
Total assets7,386,952 7,409,999 7,642,796 7,637,924 7,567,592 
Total deposits6,582,455 6,618,854 6,847,592 6,874,745 6,805,737 
Long-term debt156,223 156,163 156,102 156,041 155,981 
Total shareholders’ equity518,647 507,203 503,815 468,598 476,279 
Total shareholders’ equity to total assets7.02 %6.84 %6.59 %6.14 %6.29 %
ASSET QUALITY     
Allowance for credit losses (ACL)$62,225 $63,532 $63,934 $64,517 $63,849 
Nonaccrual loans10,257 10,132 7,008 6,652 11,061 
Non-performing assets (NPA)10,257 10,132 7,008 6,652 11,061 
Ratio of ACL to total loans1.16 %1.18 %1.18 %1.17 %1.16 %
Ratio of NPA to total assets0.14 %0.14 %0.09 %0.09 %0.15 %
PER SHARE OF COMMON STOCK OUTSTANDING     
Book value per common share$19.16 $18.76 $18.63 $17.33 $17.61 
Closing market price per common share21.20 19.75 19.68 16.68 15.71 



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)TABLE 2
 
 Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,
(Dollars in thousands, except share data)20242024202320232023
ASSETS   
Cash and due from financial institutions$103,829 $98,410 $116,181 $108,818 $129,071 
Interest-bearing deposits in other financial institutions195,062 214,472 406,256 329,913 181,913 
Investment securities:  
Available-for-sale debt securities, at fair value676,719 660,833 647,210 625,253 664,071 
Held-to-maturity debt securities, at amortized cost; fair value of: $528,088 at June 30, 2024, $541,685 at March 31, 2024, $565,178 at December 31, 2023, $531,887 at September 30, 2023, and $581,222 at June 30, 2023615,867 624,948 632,338 640,053 649,946 
Total investment securities1,292,586 1,285,781 1,279,548 1,265,306 1,314,017 
Loans held for sale3,950 755 1,778 — 2,593 
Loans, net of deferred fees and costs5,383,644 5,401,417 5,438,982 5,508,710 5,520,683 
Less: allowance for credit losses(62,225)(63,532)(63,934)(64,517)(63,849)
Loans, net of allowance for credit losses5,321,419 5,337,885 5,375,048 5,444,193 5,456,834 
Premises and equipment, net100,646 97,688 96,184 97,378 96,479 
Accrued interest receivable23,184 21,957 21,511 21,529 20,463 
Investment in unconsolidated entities40,155 40,780 41,546 42,523 45,218 
Mortgage servicing rights8,636 8,599 8,696 8,797 8,843 
Bank-owned life insurance173,716 172,228 170,706 168,543 168,136 
Federal Home Loan Bank of Des Moines ("FHLB") stock6,925 6,921 6,793 10,995 10,960 
Right-of-use lease assets32,081 32,079 29,720 32,294 33,247 
Other assets84,763 92,444 88,829 107,635 99,818 
Total assets$7,386,952 $7,409,999 $7,642,796 $7,637,924 $7,567,592 
LIABILITIES     
Deposits:     
Noninterest-bearing demand$1,847,173 $1,848,554 $1,913,379 $1,969,523 $2,009,387 
Interest-bearing demand1,283,669 1,290,321 1,329,189 1,345,843 1,359,978 
Savings and money market2,234,111 2,211,966 2,209,733 2,209,550 2,184,652 
Time1,217,502 1,268,013 1,395,291 1,349,829 1,251,720 
Total deposits6,582,455 6,618,854 6,847,592 6,874,745 6,805,737 
Long-term debt, net of unamortized debt issuance costs of: $324 at June 30, 2024, $384 at March 31, 2024, $445 at December 31, 2023, $506 at September 30, 2023 and $566 at June 30, 2023156,223 156,163 156,102 156,041 155,981 
Lease liabilities33,422 33,169 30,634 33,186 34,111 
Accrued interest payable14,998 16,654 18,948 16,752 11,402 
Other liabilities81,207 77,956 85,705 88,602 84,082 
Total liabilities6,868,305 6,902,796 7,138,981 7,169,326 7,091,313 
EQUITY
Shareholders' equity:     
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023— — — — — 
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,063,644 at June 30, 2024, 27,042,326 at March 31, 2024, 27,045,033 at December 31, 2023, 27,043,169 at September 30, 2023, and 27,045,792 at June 30, 2023404,494 404,494 405,439 405,439 405,511 
Additional paid-in capital104,161 103,130 102,982 102,550 101,997 
Retained earnings132,683 123,902 117,990 110,156 104,046 
Accumulated other comprehensive loss(122,691)(124,323)(122,596)(149,547)(135,275)
Total shareholders' equity518,647 507,203 503,815 468,598 476,279 
Total liabilities and equity$7,386,952 $7,409,999 $7,642,796 $7,637,924 $7,567,592 



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES 
Consolidated Statements of Income 
(Unaudited)TABLE 3
 Three Months EndedSix Months Ended
 Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,Jun 30,
(Dollars in thousands, except per share data)2024202420232023202320242023
Interest income:     
Interest and fees on loans$64,422 $62,819 $62,429 $62,162 $60,455 $127,241 $118,724 
Interest and dividends on investment securities:
Taxable investment securities8,466 7,211 7,292 7,016 7,145 15,677 14,481 
Tax-exempt investment securities598 655 686 709 727 1,253 1,517 
Interest on deposits in other financial institutions2,203 3,611 3,597 2,412 877 5,814 1,154 
Dividend income on FHLB stock151 106 109 113 120 257 256 
Total interest income75,840 74,402 74,113 72,412 69,324 150,242 136,132 
Interest expense:       
Interest on deposits:       
Interest-bearing demand490 499 467 460 411 989 774 
Savings and money market8,977 8,443 7,459 6,464 4,670 17,420 8,056 
Time12,173 12,990 12,741 11,268 8,932 25,163 15,196 
Interest on short-term borrowings1 — — — 378 1 1,139 
Interest on long-term debt2,278 2,283 2,304 2,292 2,199 4,561 4,037 
Total interest expense23,919 24,215 22,971 20,484 16,590 48,134 29,202 
Net interest income51,921 50,187 51,142 51,928 52,734 102,108 106,930 
Provision for credit losses2,239 3,936 4,653 4,874 4,319 6,175 6,171 
Net interest income after provision for credit losses49,682 46,251 46,489 47,054 48,415 95,933 100,759 
Other operating income:       
Mortgage banking income1,040 613 611 765 690 1,653 1,216 
Service charges on deposit accounts2,135 2,103 2,312 2,193 2,137 4,238 4,248 
Other service charges and fees5,869 5,261 5,349 5,203 4,994 11,130 9,979 
Income from fiduciary activities1,449 1,435 1,272 1,234 1,068 2,884 2,389 
Income from bank-owned life insurance1,234 1,522 2,015 379 1,185 2,756 2,476 
Net loss on sales of investment securities— — (1,939)(135)— — — 
Other394 310 5,552 408 361 704 1,136 
Total other operating income12,121 11,244 15,172 10,047 10,435 23,365 21,444 
Other operating expense:       
Salaries and employee benefits21,246 20,735 20,164 19,015 20,848 41,981 42,871 
Net occupancy4,597 4,600 4,676 4,725 4,310 9,197 8,784 
Computer software4,381 4,287 4,026 4,473 4,621 8,668 9,227 
Legal and professional services2,506 2,320 2,245 2,359 2,469 4,826 5,355 
Equipment995 1,010 968 1,112 932 2,005 1,878 
Advertising901 914 1,045 968 942 1,815 1,875 
Communication657 837 632 809 791 1,494 1,569 
Other5,868 5,873 8,766 6,150 4,990 11,741 10,451 
Total other operating expense41,151 40,576 42,522 39,611 39,903 81,727 82,010 
Income before income taxes20,652 16,919 19,139 17,490 18,947 37,571 40,193 
Income tax expense4,835 3,974 4,273 4,349 4,472 8,809 9,531 
Net income$15,817 $12,945 $14,866 $13,141 $14,475 $28,762 $30,662 
Per common share data:       
Basic earnings per share$0.58 $0.48 $0.55 $0.49 $0.54 $1.06 $1.14 
Diluted earnings per share0.58 0.48 0.55 0.49 0.53 1.06 1.13 
Cash dividends declared0.26 0.26 0.26 0.26 0.26 0.52 0.52 
Basic weighted average shares outstanding27,053,549 27,046,525 27,044,121 27,042,762 27,024,043 27,050,037 27,011,659 
Diluted weighted average shares outstanding27,116,349 27,099,101 27,097,285 27,079,484 27,071,478 27,106,267 27,090,258 



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
June 30, 2024March 31, 2024June 30, 2023
 AverageAverage AverageAverage AverageAverage 
(Dollars in thousands)BalanceYield/RateInterestBalanceYield/RateInterestBalanceYield/RateInterest
ASSETS
Interest-earning assets:         
Interest-bearing deposits in other financial institutions$162,393 5.46 %$2,203 $265,418 5.47 %$3,611 $69,189 5.08 %$877 
Investment securities:
Taxable1,335,100 2.54 8,466 1,324,657 2.18 7,211 1,379,319 2.07 7,145 
Tax-exempt [1]142,268 2.13 757 142,830 2.32 829 151,979 2.42 920 
Total investment securities1,477,368 2.50 9,223 1,467,487 2.19 8,040 1,531,298 2.11 8,065 
Loans, including loans held for sale5,385,829 4.80 64,422 5,400,558 4.67 62,819 5,543,398 4.37 60,455 
FHLB stock6,925 8.71 151 6,801 6.24 106 11,721 4.10 120 
Total interest-earning assets7,032,515 4.34 75,999 7,140,264 4.19 74,576 7,155,606 3.89 69,517 
Noninterest-earning assets306,199   309,397   308,023   
Total assets$7,338,714   $7,449,661   $7,463,629   
LIABILITIES AND EQUITY
Interest-bearing liabilities:        
Interest-bearing demand deposits$1,273,901 0.15 %$490 $1,296,865 0.15 %$499 $1,367,878 0.12 %$411 
Savings and money market deposits2,221,754 1.63 8,977 2,218,250 1.53 8,443 2,172,680 0.86 4,670 
Time deposits up to $250,000555,809 3.29 4,548 544,279 3.21 4,339 390,961 1.82 1,770 
Time deposits over $250,000703,280 4.36 7,625 794,019 4.38 8,651 790,864 3.63 7,162 
Total interest-bearing deposits4,754,744 1.83 21,640 4,853,413 1.82 21,932 4,722,383 1.19 14,013 
FHLB advances and other short-term borrowings66 5.60 1 — — — 29,791 5.09 378 
Long-term debt156,188 5.86 2,278 156,129 5.88 2,283 155,946 5.65 2,199 
Total interest-bearing liabilities4,910,998 1.96 23,919 5,009,542 1.94 24,215 4,908,120 1.36 16,590 
Noninterest-bearing deposits1,788,023   1,806,399   1,952,267   
Other liabilities130,186   132,600   125,531   
Total liabilities6,829,207   6,948,541   6,985,918   
Total equity509,507   501,120   477,711   
Total liabilities and equity$7,338,714   $7,449,661   $7,463,629   
Net interest income  $52,080   $50,361   $52,927 
Interest rate spread2.38 %2.25 %2.53 %
Net interest margin 2.97 %  2.83 %  2.96 % 
[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
 Six Months EndedSix Months Ended
June 30, 2024June 30, 2023
 AverageAverage AverageAverage 
(Dollars in thousands)BalanceYield/RateInterestBalanceYield/RateInterest
ASSETS
Interest-earning assets:      
Interest-bearing deposits in other financial institutions$213,905 5.47 %$5,814 $47,195 4.93 %$1,154 
Investment securities:
Taxable1,329,879 2.36 15,677 1,387,606 2.09 14,481 
Tax-exempt [1]142,549 2.23 1,586 152,520 2.52 1,920 
Total investment securities1,472,428 2.34 17,263 1,540,126 2.13 16,401 
Loans, including loans held for sale5,393,193 4.74 127,241 5,534,741 4.32 118,724 
FHLB stock6,863 7.49 257 12,049 4.26 256 
Total interest-earning assets7,086,389 4.26 150,575 7,134,111 3.85 136,535 
Noninterest-earning assets307,799   319,642   
Total assets$7,394,188   $7,453,753   
LIABILITIES AND EQUITY
Interest-bearing liabilities:      
Interest-bearing demand deposits$1,285,383 0.15 %$989 $1,391,386 0.11 %$774 
Savings and money market deposits2,220,002 1.58 17,420 2,177,783 0.75 8,056 
Time deposits up to $250,000550,044 3.25 8,887 366,316 1.60 2,907 
Time deposits over $250,000748,649 4.37 16,276 740,428 3.35 12,289 
Total interest-bearing deposits4,804,078 1.82 43,572 4,675,913 1.04 24,026 
FHLB advances and other short-term borrowings33 5.60 1 47,031 4.88 1,139 
Long-term debt156,159 5.87 4,561 141,689 5.75 4,037 
Total interest-bearing liabilities4,960,270 1.95 48,134 4,864,633 1.21 29,202 
Noninterest-bearing deposits1,797,212   1,989,295   
Other liabilities131,392   129,152   
Total liabilities6,888,874   6,983,080   
Total equity505,314   470,673   
Total liabilities and equity$7,394,188   $7,453,753   
Net interest income  $102,441   $107,333 
Interest rate spread2.31 %2.64 %
Net interest margin 2.90 %  3.02 % 
[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
 Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,
(Dollars in thousands)20242024202320232023
HAWAII:     
Commercial and industrial$415,538 $420,009 $421,736 $406,433 $374,601 
Real estate:
Construction147,657 145,213 163,337 174,057 168,012 
Residential mortgage1,913,177 1,924,889 1,927,789 1,930,740 1,942,906 
Home equity706,811 729,210 736,524 753,980 750,760 
Commercial mortgage1,150,703 1,103,174 1,063,969 1,045,625 1,037,826 
Consumer287,295 306,563 322,346 338,248 327,790 
Total loans, net of deferred fees and costs4,621,181 4,629,058 4,635,701 4,649,083 4,601,895 
Less: Allowance for credit losses(47,902)(48,739)(48,189)(48,105)(44,828)
Loans, net of allowance for credit losses$4,573,279 $4,580,319 $4,587,512 $4,600,978 $4,557,067 
U.S. MAINLAND: [1]     
Commercial and industrial$169,318 $156,087 $153,971 $157,373 $170,557 
Real estate:
Construction23,865 23,356 22,182 37,455 32,807 
Commercial mortgage314,667 319,088 318,933 319,802 329,736 
Consumer254,613 273,828 308,195 344,997 385,688 
Total loans, net of deferred fees and costs762,463 772,359 803,281 859,627 918,788 
Less: Allowance for credit losses(14,323)(14,793)(15,745)(16,412)(19,021)
Loans, net of allowance for credit losses$748,140 $757,566 $787,536 $843,215 $899,767 
TOTAL:     
Commercial and industrial$584,856 $576,096 $575,707 $563,806 $545,158 
Real estate:
Construction171,522 168,569 185,519 211,512 200,819 
Residential mortgage1,913,177 1,924,889 1,927,789 1,930,740 1,942,906 
Home equity706,811 729,210 736,524 753,980 750,760 
Commercial mortgage1,465,370 1,422,262 1,382,902 1,365,427 1,367,562 
Consumer541,908 580,391 630,541 683,245 713,478 
Total loans, net of deferred fees and costs5,383,644 5,401,417 5,438,982 5,508,710 5,520,683 
Less: Allowance for credit losses(62,225)(63,532)(63,934)(64,517)(63,849)
Loans, net of allowance for credit losses$5,321,419 $5,337,885 $5,375,048 $5,444,193 $5,456,834 
[1] U.S. Mainland includes territories of the United States.



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Deposits
(Unaudited)TABLE 7
 
 Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,
(Dollars in thousands)20242024202320232023
Noninterest-bearing demand$1,847,173 $1,848,554 $1,913,379 $1,969,523 $2,009,387 
Interest-bearing demand1,283,669 1,290,321 1,329,189 1,345,843 1,359,978 
Savings and money market2,234,111 2,211,966 2,209,733 2,209,550 2,184,652 
Time deposits up to $250,000547,212 544,600 533,898 465,543 427,864 
Core deposits5,912,165 5,895,441 5,986,199 5,990,459 5,981,881 
Government time deposits193,833 235,463 374,581 400,130 383,426 
Other time deposits greater than $250,000476,457 487,950 486,812 484,156 440,430 
Total time deposits greater than $250,000670,290 723,413 861,393 884,286 823,856 
Total deposits$6,582,455 $6,618,854 $6,847,592 $6,874,745 $6,805,737 



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Nonperforming Assets and Accruing Loans 90+ Days Past Due
(Unaudited)TABLE 8
 Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,
(Dollars in thousands)20242024202320232023
Nonaccrual loans:
Commercial and industrial$355 $357 $432 $352 $319 
Real estate:
Construction— — — — 4,851 
Residential mortgage7,991 7,979 4,962 4,949 4,385 
Home equity1,247 929 834 677 797 
Commercial mortgage77 77 77 77 77 
Consumer587 790 703 597 632 
Total nonaccrual loans10,257 10,132 7,008 6,652 11,061 
Other real estate owned ("OREO")— — — — — 
Total nonperforming assets ("NPAs")10,257 10,132 7,008 6,652 11,061 
Accruing loans 90+ days past due:     
Real estate:  
Construction— 588 — — — 
Residential mortgage1,273 386 — 794 959 
Home equity135 560 229 — 133 
Consumer896 924 1,083 2,120 2,207 
Total accruing loans 90+ days past due2,304 2,458 1,312 2,914 3,299 
Total NPAs and accruing loans 90+ days past due$12,561 $12,590 $8,320 $9,566 $14,360 
Ratio of total nonaccrual loans to total loans0.19 %0.19 %0.13 %0.12 %0.20 %
Ratio of total NPAs to total assets0.14 0.14 0.09 0.09 0.15 
Ratio of total NPAs to total loans and OREO0.19 0.19 0.13 0.12 0.20 
Ratio of total NPAs and accruing loans 90+ days past due to total loans and OREO0.23 0.23 0.15 0.17 0.26 
Quarter-to-quarter changes in NPAs:    
Balance at beginning of quarter$10,132 $7,008 $6,652 $11,061 $5,313 
Additions1,920 4,792 1,836 2,311 7,105 
Reductions:  
Payments(363)(263)(268)(5,718)(290)
Return to accrual status(27)(198)(137)(207)(212)
Charge-offs, valuation and other adjustments(1,405)(1,207)(1,075)(795)(855)
Total reductions(1,795)(1,668)(1,480)(6,720)(1,357)
Balance at end of quarter$10,257 $10,132 $7,008 $6,652 $11,061 



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Allowance for Credit Losses on Loans
(Unaudited)TABLE 9
 
 Three Months EndedSix Months Ended
 Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,Jun 30,
(Dollars in thousands)2024202420232023202320242023
Allowance for credit losses:     
Balance at beginning of period$63,532 $63,934 $64,517 $63,849 $63,099 $63,934 $63,738 
Provision for credit losses on loans2,448 4,121 4,959 4,526 4,135 6,569 5,750 
Charge-offs: 
Commercial and industrial(519)(682)(419)(402)(362)(1,201)(1,141)
Real estate:
Residential mortgage(284)— — — — (284)— 
Consumer(4,345)(4,838)(5,976)(4,710)(3,873)(9,183)(6,559)
Total charge-offs(5,148)(5,520)(6,395)(5,112)(4,235)(10,668)(7,700)
Recoveries:     
Commercial and industrial130 90 84 261 125 220 375 
Real estate:
Construction— — — 1 — — — 
Residential mortgage9 8 7 10 7 17 60 
Home equity— 6 42 — 15 6 15 
Consumer1,254 893 720 982 703 2,147 1,611 
Total recoveries1,393 997 853 1,254 850 2,390 2,061 
Net charge-offs
(3,755)(4,523)(5,542)(3,858)(3,385)(8,278)(5,639)
Balance at end of period$62,225 $63,532 $63,934 $64,517 $63,849 $62,225 $63,849 
Average loans, net of deferred fees and costs$5,385,829 $5,400,558 $5,458,245 $5,507,248 $5,543,398 $5,393,193 $5,534,741 
Ratio of annualized net charge-offs to average loans0.28 %0.34 %0.41 %0.28 %0.24 %0.31 %0.20 %
Ratio of ACL to total loans1.16 1.18 1.18 1.17 1.16 1.16 %1.16 %


2nd Quarter 2024 Earnings Supplement July 31, 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; the increase in inventory or adverse conditions in the real estate market and deterioration in the construction industry; adverse changes in the financial performance and/or condition of our borrowers and, as a result, increased loan delinquency rates, deterioration in asset quality, and losses in our loan portfolio; the impact of local, national, and international economies and events (including natural disasters such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, and earthquakes) on the Company's business and operations and on tourism, the military, and other major industries operating within the Hawaii market and any other markets in which the Company does business; deterioration or malaise in domestic economic conditions, including any destabilization in the financial industry and deterioration of the real estate market, as well as the impact of declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, changes in capital standards, other regulatory reform and federal and state legislation, including but not limited to regulations promulgated by the Consumer Financial Protection Bureau, government-sponsored enterprise reform, and any related rules and regulations which affect our business operations and competitiveness; the costs and effects of legal and regulatory developments, including legal proceedings and lawsuits we are or may become subject to, or regulatory or other governmental inquiries and proceedings and the resolution thereof; the results of regulatory examinations or reviews and the effect of, and our ability to comply with, any regulations or regulatory orders or actions we are or may become subject to, and the effect of any recurring or special FDIC assessments; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters and the cost and resources required to implement such changes; the effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System; securities market and monetary fluctuations, including the impact resulting from the elimination of the London Interbank Offered Rate Index; negative trends in our market capitalization and adverse changes in the price of the Company's common stock; the effects of any acquisitions or dispositions we may make; political instability; acts of war or terrorism; changes in consumer spending, borrowings and savings habits; technological changes and developments; cybersecurity and data privacy breaches and the consequence therefrom; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; our ability to address deficiencies in our internal controls over financial reporting or disclosure controls and procedures; changes in the competitive environment among financial holding companies and other financial service providers; our ability to successfully implement our initiatives to lower our efficiency ratio; our ability to attract and retain key personnel; changes in our personnel, organization, compensation and benefit plans; our ability to successfully implement and achieve the objectives of our Banking-as-a-Service initiatives, including adoption of the initiatives by customers and risks faced by any of our bank collaborations including reputational and regulatory risk; and our success at managing the risks involved in the foregoing items. For further information with respect to factors that could cause actual results to materially differ from the expectations or projections stated in the FLS, please see the Company's publicly available Securities and Exchange Commission filings, including the Company's Form 10-K for the last fiscal year and, in particular, the discussion of "Risk Factors" set forth therein. We urge investors to consider all of these factors carefully in evaluating the FLS contained in this document. FLS speak only as of the date on which such statements are made. We undertake no obligation to update any FLS to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events except as required by law.

 
3Central Pacific Financial Corp. 2nd Quarter 2024 Financial Highlights • Net income of $15.8MM increased 22% from prior quarter • NIM expanded 14 bps sequential quarter • Core deposits grew $16.7MM from prior quarter • TCE ratio improved to 7.0% • Quarterly cash dividend maintained at $0.26 2Q24 1Q24 NET INCOME / DILUTED EPS $15.8MM / $0.58 $12.9MM / $0.48 PRE-PROVISION NET REVENUE (PPNR) $22.9MM $20.9MM RETURN ON ASSETS (ROA) 0.86% 0.70% RETURN ON EQUITY (ROE) 12.42% 10.33% TOTAL LOAN GROWTH/DECLINE -$17.8MM (-0.3%) -$37.6MM (-0.7%) TOTAL DEPOSIT GROWTH/DECLINE -$36.4MM (-0.5%) -$228.7MM (-3.3%) NET INTEREST MARGIN (NIM) 2.97% 2.83% TANGIBLE COMMON EQUITY (TCE) 7.00% 6.83% * Comparison to prior quarter * *

 
4Central Pacific Financial Corp. Tourism Visitor arrivals compared to pre-pandemic 92% 1 Employment Unemployment Rate June 2024 2.9% 1 FACTORS FOR A FAVORABLE HAWAII OUTLOOK • Maui tourism recovery from Maui wildfires in August 2023 continues with visitor arrivals at 78% of the previous year in June 2024 • Japanese visitor return slowly improving, with counts up 28% from a year ago, yet still at ~50% 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 1 Source: Hawaii Department of Business, Economic Development & Tourism. Tourism represents total visitor in June 2024 compared to June 2019. 2 Source: Honolulu Board of Realtors. Resilient Hawaii Economy Housing Oahu Median Single- Family Home Price June 2024 $1.1MM 2 1

 
5Central Pacific Financial Corp. • Conservative growth approach and healthy pipeline in the current environment • Strong and diverse loan portfolio, with nearly 80% secured by real estate • Overall portfolio yield improved 13 bps to 4.80% in the 2Q24 Diversified Loan Portfolio2 1.22 1.34 1.43 1.60 1.69 1.88 1.94 1.93 1.92 1.91 0.88 0.98 1.04 1.12 1.16 1.22 1.36 1.38 1.42 1.47 0.36 0.41 0.47 0.49 0.55 0.64 0.74 0.74 0.73 0.71 0.45 0.47 0.49 0.57 0.48 0.62 0.80 0.63 0.58 0.54 0.51 0.50 0.58 0.57 0.96 0.62 0.55 0.57 0.58 0.58 3.52 3.77 4.08 4.45 4.96 5.10 5.56 5.44 5.40 5.38 - 1.00 2.00 3.00 4.00 5.00 6.00 2016 2017 2018 2019 2020 2021 2022 2023 1Q24 2Q24 $ B il li o n s Loan Portfolio Composition Residential Mortgage Commercial Mortgage Home Equity Consumer Commercial & Industrial Construction

 
6Central Pacific Financial Corp. Relationship Deposits – Diversified & Granular • 59% of deposits FDIC insured; 64% including collateralized deposits • 55% Commercial (Average account balance of $103,000) / 45% 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 1.27 1.40 1.44 1.45 1.79 2.29 2.09 1.91 1.85 1.85 0.86 0.93 0.95 1.04 1.18 1.42 1.46 1.33 1.29 1.28 0.39 0.46 0.48 0.50 0.40 0.49 0.70 1.02 1.03 1.03 0.70 0.69 0.63 0.53 0.50 0.21 0.29 0.38 0.24 0.19 4.61 4.96 4.95 5.12 5.80 6.64 6.74 6.85 6.62 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 $ B il li o n s Deposit Portfolio Composition Savings and Money Market Noninterest-Bearing Demand Interest-Bearing Demand Time Deposits excluding Government Government Time Deposits

 
7Central Pacific Financial Corp. 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q24 2Q24 Total Deposit Cost CPF Peer average* Fed Funds Deposit Cost Advantage * Public banks $3-10B in total assets as of 1Q24. Source: S&P Global. Cycle-to-date total deposit beta of 24% as of 2Q24 99 bps funding advantage Proven history of funding cost advantage with recent cost stabilization

 
8Central Pacific Financial Corp. 0.11% 0.12% 0.13% 0.19% 0.19% 0.09% 0.20% 2Q23 3Q23 4Q23 1Q24 2Q24 NPAs/Total Loans 5 * NPA increase relates to 2 Hawaii construction loans to a single borrower that subsequently paid off in full in mid-July 2023. 2Q23 NPAs/Total Loans ratio is 0.11% excluding the 2 Hawaii construction loans mentioned above. Strong credit risk management continues to drive low levels of problem assets * Solid Credit Profile 0.06% 0.05% 0.02% 0.05% 0.05% 2Q23 3Q23 4Q23 1Q24 2Q24 Delinquencies 90+Days/Total Loans 1.34% 1.09% 0.92% 0.56% 0.66% 2Q23 3Q23 4Q23 1Q24 2Q24 Criticized/Total Loans 0.04% 0.05% 0.07% 0.10% 0.08% 0.20% 0.23% 0.34% 0.24% 0.20% 0.24% 0.28% 0.41% 0.34% 0.28% 2Q23 3Q23 4Q23 1Q24 2Q24 Annualized NCO/Avg Loans All Other NCO/Avg Loans Mainland Consumer NCO/Avg Loans

 
9Central Pacific Financial Corp. • $2.4MM provision for credit loss on loans in 2Q24 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 $2.2MM • Strong ACL coverage ratio of 1.16% for 2Q24 Note: Totals may not sum due to rounding. Allowance for Credit Losses $ Millions 2Q23 3Q23 4Q23 1Q24 2Q24 Beginning Balance 63.1 63.8 64.5 63.9 63.5 Net Charge-offs (3.4) (3.9) (5.5) (4.5) (3.8) Provision for Credit Losses 4.1 4.5 5.0 4.1 2.4 Ending Balance 63.8 64.5 63.9 63.5 62.2 Coverage Ratio (ACL to Total Loans) 1.16% 1.17% 1.18% 1.18% 1.16%

 
10Central Pacific Financial Corp. High Quality Securities Portfolio • $1.3B or 17% of total assets • 92% AAA rated • Portfolio mix: AFS 52% / HTM 48% • $29.7MM in investment securities purchased in 2Q24 at weighted average yield of 4.73% • Interest rate swap on $115.5MM of municipal securities started on 3/31/24; added $0.9MM to interest income in 2Q24 (pay fixed at 2.1%, receive float at Fed Funds) U.S. Treasury & Gov't Agency 82% Municipals 12% Non-Agency CMBS/RMBS 2% Corporate 3% Other 1% Investment Portfolio Composition as of June 30, 2024

 
11Central Pacific Financial Corp. • Ample alternative sources of liquidity available • Available sources of liquidity total 121% of uninsured/uncollateralized deposits Available Sources of Liquidity $ Millions June 30, 2024 Cash on Balance Sheet 299 Other Funding Sources: Unpledged Securities 509 FHLB Available Borrowing Capacity 1,739 FRB Available Borrowing Capacity 238 Other Funding Lines 75 Total 2,561 Total Sources of Liquidity 2,860 Uninsured/Uncollateralized Deposits 2,367 % of Uninsured/Uncollateralized Deposits 121%

 
121Central Pacific Financial Corp. 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Tier 1 Leverage CET1 Total Capital Regulatory Capital Ratios As June 30, 2024 Regulatory Minimum Well-Capitalized CPF Solid Capital Position 9.3% $270MM capital cushion to well capitalized minimum 11.9% 15.1% STRONG CAPITAL AND SHAREHOLDER RETURN • TCE ratio of 7.0% and CET1 ratio of 11.9% both increasing with retained earnings • Maintained quarterly cash dividend at $0.26 per share which will be payable on September 16, 2024 • No shares repurchased in the 2Q24. $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. Appendix

 
14Central Pacific Financial Corp. Commercial Real Estate Portfolio OFFICE RETAIL TOTAL BALANCE $174.2MM $296.0MM % OF TOTAL CRE 12% 20% % OF TOTAL LOANS 3% 6% WA LTV 55% 65% WA MONTHS TO MATURITY 69 65 INVESTOR / OWNER-OCCUPIED $129.1MM / $45.1MM $218.5MM / $77.5MM • Hawaii 79% / Mainland 21% • Investor 76% / Owner-Occupied 24% Industrial/ Warehouse 27% Retail 20% Apartment 20% Office 12% Hotel 11% Other 5% Shopping Center 3% Storage 2% CRE Portfolio Composition as of June 30, 2024

 
15Central Pacific Financial Corp. • Total Hawaii Consumer $287MM / Total Mainland Consumer $255MM • Weighted average origination FICO: • 744 for Hawaii Consumer • 737 for Mainland Consumer • Consumer net charge-offs peaked in 4Q23 and declined for 2 consecutive quarters in 2024 thus far • Mainland Unsecured: Highly granular with average loan amounts of $12,000 Consumer Loan Portfolio HI Auto $161 , 30% HI Other $126 , 23% Mainland Home Improvement $103 , 19% Mainland Unsecured $69 , 13% Mainland Auto $83 , 15% Consumer Portfolio Composition as of June 30, 2024 ($ Millions)

 
16Central 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

 
17Central Pacific Financial Corp. Environmental, Social & Governance (ESG) Focus 2023 ESG Report available here: https://www.cpb.bank/esg

 
18Central Pacific Financial Corp. Mahalo

 
v3.24.2
Cover Cover
Jul. 31, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 31, 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
Central Pacific Financial (NYSE:CPF)
Historical Stock Chart
From Jul 2024 to Aug 2024 Click Here for more Central Pacific Financial Charts.
Central Pacific Financial (NYSE:CPF)
Historical Stock Chart
From Aug 2023 to Aug 2024 Click Here for more Central Pacific Financial Charts.