CPF - Central Pacific Financial Reports Second Quarter 2025 Earnings of $18.3 Million

Highlights include:

• Net income of $18.3 million, or $0.67 per diluted share
• Return on average assets of 1.00% and return on average equity of 13.04%
• Efficiency ratio improved to 60.36%
• Net interest margin of 3.44% increased by 13 bps from 3.31% in the previous quarter
• Total risk-based capital and common equity tier 1 ratios of 15.8% and 12.6%, respectively
• The CPF Board of Directors approved a quarterly cash dividend of $0.27 per share
• CPB was named Best Bank In Hawaii by Forbes Magazine in 2025. This is the fourth consecutive year the Bank has made the Forbes list.

Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $18.3 million, or fully diluted earnings per share ("EPS") of $0.67 for the second quarter of 2025, compared to net income of $17.8 million, or EPS of $0.65 in the previous quarter and net income of $15.8 million, or EPS of $0.58 in the year-ago quarter.

"Our second quarter financial results demonstrate the continued strength of our core business and ability to execute effectively in a dynamic market environment," stated Arnold Martines, Chairman, President and CEO. "The bank's strong asset quality, capital, and liquidity positions will enable us to grow our business by continuing to support the needs of our customers and the markets we serve. I want to thank our dedicated employees, customers and community for your continued support of our bank."

Earnings Highlights

Net interest income was $59.8 million for the second quarter of 2025, which increased by $2.1 million, or 3.6% from the previous quarter, and increased by $7.9 million, or 15.2% from the year-ago quarter. Net interest margin ("NIM") was 3.44% for the second quarter of 2025, an increase of 13 basis points ("bp" or "bps") from the previous quarter and an increase of 47 bps from the year-ago quarter. The sequential quarter increase in net interest income and NIM was primarily due to higher average yields earned on loans of 8 bps and investment securities of 2 bps, combined with a 7 bps decline in average rates paid on interest-bearing deposits. Interest income on investment securities also included $0.7 million in income from an interest rate swap in both the first and second quarters of 2025.

The Company recorded a provision for credit losses of $5.0 million in the second quarter of 2025, compared to a provision of $4.2 million in the previous quarter and a provision of $2.2 million in the year-ago quarter. The provision in the current quarter consisted of a provision for credit losses on loans of $3.8 million and a provision for off-balance sheet exposures of $1.2 million. The increase in the provision from the previous quarter was primarily driven by higher off-balance sheet credit exposure related to new unfunded loan commitments.

Other operating income totaled $13.0 million for the second quarter of 2025, compared to $11.1 million in the previous quarter and $12.1 million in the year-ago quarter. The increase in other operating income from the previous quarter was primarily due to higher income from bank-owned life insurance of $1.8 million.

Other operating expense totaled $43.9 million for the second quarter of 2025, compared to $42.1 million in the previous quarter and $41.2 million in the year-ago quarter. The increase in other operating expense from the previous quarter was primarily due to higher salaries and employee benefits of $0.9 million, higher computer software expense of $0.6 million, and higher directors' deferred compensation plan expense of $0.5 million (included in other).

The efficiency ratio improved to 60.36% for the second quarter of 2025, compared to 61.16% in the previous quarter and 64.26% in the year-ago quarter.

The effective tax rate was 23.5% for the second quarter of 2025, compared to 21.2% in the previous quarter and 23.4% in the year-ago quarter. The increase in the effective tax rate in the second quarter of 2025 was primarily attributable to discrete items that lowered the rate in the prior quarter.

Balance Sheet Highlights

Total assets of $7.37 billion at June 30, 2025 reflected a decrease of $35.7 million, or 0.5% from $7.41 billion at March 31, 2025, and a decrease of $17.4 million, or 0.2% from $7.39 billion at June 30, 2024.

Total loans, net of deferred fees and costs, of $5.29 billion at June 30, 2025 decreased by $44.7 million, or 0.8% from $5.33 billion at March 31, 2025, and decreased by $93.8 million, or 1.7% from $5.38 billion at June 30, 2024. Average yield earned on loans during the second quarter of 2025 was 4.96%, compared to 4.88% in the previous quarter and 4.80% in the year-ago quarter.

Total deposits of $6.54 billion at June 30, 2025 decreased by $51.1 million or 0.8% from $6.60 billion at March 31, 2025, and decreased by $37.5 million, or 0.6% from $6.58 billion at June 30, 2024. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.96 billion at June 30, 2025, and decreased by $19.0 million, or 0.3% from $5.98 billion at March 31, 2025, and increased by $44.5 million, or 0.8% from $5.91 billion at June 30, 2024. Average rate paid on total deposits during the second quarter of 2025 was 1.02%, compared to 1.08% in the previous quarter and 1.33% in the year-ago quarter.

Asset Quality

Nonperforming assets totaled $14.9 million, or 0.20% of total assets at June 30, 2025, compared to $11.1 million, or 0.15% of total assets at March 31, 2025 and $10.3 million, or 0.14% of total assets at June 30, 2024.

Net charge-offs totaled $4.7 million in the second quarter of 2025, compared to net charge-offs of $2.6 million in the previous quarter, and net charge-offs of $3.8 million in the year-ago quarter. The increase in net charge-offs during the second quarter of 2025 was primarily due to a $2.0 million full charge-off of a commercial and industrial loan. Annualized net charge-offs as a percentage of average loans was 0.35%, 0.20% and 0.28% during the three months ended June 30, 2025, March 31, 2025 and June 30, 2024, respectively.

The allowance for credit losses, as a percentage of total loans was 1.13% at June 30, 2025, compared to 1.13% at March 31, 2025, and 1.16% at June 30, 2024.

Capital

Total shareholders' equity was $568.9 million at June 30, 2025, compared to $557.4 million and $518.6 million at March 31, 2025 and June 30, 2024, respectively.

During the second quarter of 2025, the Company repurchased 103,077 shares of common stock at a total cost of $2.6 million, or $25.00 per share. As of June 30, 2025, $25.3 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 9.6%, 12.6%, 13.5%, and 15.8%, respectively, at June 30, 2025, compared to 9.4%, 12.4%, 13.4%, and 15.6%, respectively, at March 31, 2025.

On July 24, 2025, the Company's Board of Directors declared a quarterly cash dividend of $0.27 per share on its outstanding common shares. The dividend will be payable on September 15, 2025 to shareholders of record at the close of business on August 29, 2025.

Conference Call

The Company's management will host a conference call today at 2:00 p.m. Eastern Time (8:00 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 August 24, 2025 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 $7.37 billion in assets as of June 30, 2025. Central Pacific Bank, its primary subsidiary, operates 27 branches and 55 ATMs in the State of Hawaii. Central Pacific Financial Corp. is traded on the New York Stock Exchange (NYSE) under the symbol "CPF." For additional information, please visit: cpb.bank

Equal Housing Lender
Member FDIC
CPF Listed NYSE

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, net interest income, 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, 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 the persistence of current inflationary pressures, or the resurgence of elevated levels of inflation in the United States and our market areas, and its impact on market interest rates, the economy and credit quality; the impact of the current U.S. administration’s recent economic policies, including potential international tariffs and other cost cutting initiatives; the adverse effects of bank failures and the potential impact of such developments on customer confidence, deposit behavior, liquidity and regulatory responses thereto; the adverse effects of pandemic viruses (and their variants), epidemics and other public health emergencies 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 associated therewith; political instability; acts of war or terrorism or military conflicts domestically or internationally; changes in consumer spending, borrowings and savings habits; technological changes and developments; cybersecurity and data privacy breaches and the consequence therefrom, including those involving our third-party vendors or other service providers; susceptibility of fraud on our business; 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; uncertainty regarding United States fiscal debt, deficit and budget matters; 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 Forms 10-Q and 10-K for the last fiscal quarter and 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.