Exhibit

EX-99.1 2 exhibit99-1q42015.htm EXHIBIT 99.1 Exhibit

Exhibit 99



			FOR IMMEDIATE RELEASE

Investor Contact:	Dane Teruya	Media Contact:	Wayne Kirihara
	VP, Treasury Manager		SVP, Chief Marketing Officer
	(808) 544-3626		(808) 544-3687
	dane.teruya@centralpacificbank.com		wayne.kirihara@centralpacificbank.com

NEWS RELEASE

CENTRAL PACIFIC FINANCIAL CORP. REPORTS $10.9 MILLION

FOURTH QUARTER EARNINGS

HONOLULU, HI, January 28, 2016 – Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank (the “Bank”), today reported net income for the fourth quarter of 2015 of $10.9 million, or $0.34 per diluted share, compared to net income in the fourth quarter of 2014 of $13.3 million, or $0.37 per diluted share, and net income in the third quarter of 2015 of $12.2 million, or $0.38 per diluted share. For the year ended December 31, 2015, the Company's net income was $45.9 million, or $1.40 per diluted share, compared to net income in the year ended December 31, 2014 of $40.5 million, or $1.07 per diluted share.

“We are pleased to report a solid fourth quarter highlighted by strong growth in loans and deposits. Additionally, our performance for the full year 2015 was excellent with gains in net income, loan and deposit growth, and an improvement in asset quality.”, said Catherine Ngo, President and Chief Executive Officer. “We believe we are well positioned for further growth and strong performance in 2016.”

On January 27, 2016, the Company’s Board of Directors declared a quarterly cash dividend of $0.14 per share on the Company’s outstanding common shares. The dividend will be payable on March 15, 2016 to shareholders of record at the close of business on February 29, 2016.

The Company did not repurchase any shares of common stock under its share repurchase program during the fourth quarter of 2015. During the year ended December 31, 2015, the Company repurchased approximately 11.7% of its common stock outstanding as of December 31, 2014.

On January 27, 2016, the Company's Board of Directors also authorized the repurchase of up to $30 million of the Company's common stock from time to time in the open market or in privately negotiated transactions, pursuant to a newly authorized share repurchase program (the "2016 Repurchase Plan"). The 2016 Repurchase Plan replaces and supersedes in its entirety the share repurchase program previously approved by the Company's Board of Directors, which had approximately $20.2 million in remaining repurchase authority at December 31, 2015.

Since reinstating quarterly cash dividends in 2013, the Company has returned a total of $46.3 million in cash dividends to its shareholders and repurchased 11,168,501 shares of common stock at a total cost of $234.8 million, excluding fees and expenses.

Central Pacific Financial Corp. Reports $10.9 Million Fourth Quarter Earnings

January 28, 2016

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Significant Highlights and Fourth Quarter Results


•	Reported net income of $10.9 million, compared to net income in the third quarter of 2015 of $12.2 million.


•	Loans and leases increased by $110.1 million, or 3.5%, to $3.21 billion at December 31, 2015, compared to $3.10 billion at September 30, 2015.


•	Total deposits increased by $202.9 million to $4.43 billion at December 31, 2015, compared to $4.23 billion at September 30, 2015. Core deposits increased by $180.83 million to $3.58 billion at December 31, 2015, compared to $3.40 billion at September 30, 2015.


•	Reported net interest income of $38.2 million, compared to $37.8 million in the third quarter of 2015. Reported a net interest margin of 3.30%, compared to 3.31% in the third quarter of 2015.


•	Recorded a credit to the provision for loan and lease losses of $2.0 million in the fourth quarter of 2015, compared to a credit to the provision for loan and lease losses of $3.6 million in the third quarter of 2015.


•	Reported an efficiency ratio of 67.82% in the fourth quarter of 2015, compared to 67.55% in the third quarter of 2015.


•	Maintained a strong capital position with leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios of 10.69%, 14.41%, 15.68%, and 12.79%, respectively, as of December 31, 2015. The Company’s capital ratios continue to be in excess of the minimum levels required for a “well-capitalized” regulatory designation under Basel III.

Earnings Highlights

Net interest income for the fourth quarter of 2015 was $38.2 million, compared to $36.2 million in the year-ago quarter and $37.8 million in the third quarter of 2015. Net interest margin was 3.30%, compared to 3.33% in the year-ago quarter and 3.31% in the third quarter of 2015. The sequential quarter increase in net interest income was primarily attributable to our average loan portfolio balances increasing by $72.5 million. In addition, the taxable equivalent yield on our investment securities portfolio increased to 2.60% in the current quarter from 2.58% last quarter. These increases were partially offset by the decrease in our taxable equivalent yield on the loans and leases portfolio to 3.87% in the current quarter from 3.91% last quarter.

In the fourth quarter of 2015, a credit to the provision for loan and lease losses of $2.0 million was recorded, compared to a credit of $5.4 million in the year-ago quarter and a credit of $3.6 million in the third quarter of 2015. The credit to the provision for loan and lease losses in the current quarter was attributable to net charge-offs of $1.4 million during the quarter and improvement in overall credit quality.

Other operating income for the fourth quarter of 2015 totaled $9.8 million, compared to $10.2 million in the year-ago quarter and remained relatively unchanged from the $9.8 million reported in the third quarter of 2015. The decrease from the year-ago quarter was primarily due to lower income from bank-owned life insurance of $0.2 million and lower income recovered on nonaccrual loans previously charged-off of $0.2 million (included in other).

Other operating expense for the fourth quarter of 2015 totaled $32.6 million, compared to $32.7 million in the year-ago quarter and $32.2 million in the third quarter of 2015. The decrease from the year-ago quarter was primarily attributable to a larger credit to the reserve for residential mortgage loan repurchase losses of $0.5 million (included in other), and lower salaries and employee benefits of $0.5 million, partially offset by higher advertising expense of $0.7 million. The sequential quarter increase was primarily due to higher advertising expense of $0.5 million and higher net occupancy expense of $0.4 million, partially offset by a $0.5 million change in the reserve for unfunded loan commitments (included in other).

The efficiency ratio for the fourth quarter of 2015 was 67.82%, compared to 70.59% in the year-ago quarter and 67.55% in the third quarter of 2015. The decrease in the efficiency ratio from the year-ago quarter was primarily attributable to the growth in net interest income. The sequential quarter increase in the efficiency ratio was primarily attributable to higher other operating expenses in the current quarter as described above.

Central Pacific Financial Corp. Reports $10.9 Million Fourth Quarter Earnings

January 28, 2016

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In the fourth quarter of 2015, the Company recorded income tax expense of $6.5 million, compared to income tax expense of $5.8 million in the year-ago quarter and $6.9 million in the third quarter of 2015. The effective tax rate for the fourth quarter of 2015 was 37.2%, compared to 30.3% in the year-ago quarter and 36.1% in the third quarter of 2015. The income tax expense and effective tax rate in the fourth quarter of 2014 was impacted by solar tax credits of $0.4 million and a credit true-up adjustment of the Company's net deferred tax assets of $0.5 million. As of December 31, 2015, the Company’s net deferred tax assets totaled $82.0 million.

Balance Sheet Highlights

Total assets at December 31, 2015 of $5.1 billion increased by $278.3 million from December 31, 2014, and increased by $109.5 million from September 30, 2015.

Total loans and leases at December 31, 2015 of $3.2 billion increased by $279.3 million and $110.1 million from December 31, 2014 and September 30, 2015, respectively. The increase in total loans and leases from the third quarter of 2015 was primarily due to an increase in the commercial, construction, residential mortgage, commercial mortgage, and consumer loan portfolios of $14.5 million, $9.5 million, $51.0 million, $23.8 million, and $11.3 million, respectively.

Total deposits at December 31, 2015 of $4.4 billion increased by $323.1 million from December 31, 2014, and increased by $202.9 million from September 30, 2015. Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $3.58 billion at December 31, 2015. This represents an increase of $276.0 million and $180.8 million from a year ago and from September 30, 2015, respectively. Changes in total deposits during the quarter included net increases in savings and money market deposits of $115.6 million, interest-bearing demand deposits of $39.0 million, noninterest-bearing demand deposits of $32.5 million, and time deposits greater than $100,000 of $22.1 million, offset by a net decrease in time deposits less than $100,000 of $6.2 million.

Total shareholders’ equity was $494.6 million at December 31, 2015, compared to $568.0 million and $503.3 million at December 31, 2014 and September 30, 2015, respectively. The sequential quarter decrease reflects common stock dividends paid of $14.4 million and a change in unrealized gains on investment securities of $7.5 million, partially offset by net income of $10.9 million. Common stock dividends paid in the fourth quarter of 2015 included a special cash dividend payment of $0.32 per share totaling $10.0 million.

Asset Quality

Nonperforming assets at December 31, 2015 totaled $16.2 million, or 0.32% of total assets, compared to $14.0 million, or 0.28% of total assets at September 30, 2015 and $42.0 million, or 0.87% of total assets at December 31, 2014. The sequential-quarter change in nonperforming assets reflects a net increase in Hawaii commercial mortgage assets of $4.4 million, partially offset by net decreases in Hawaii commercial assets of $2.0 million and Hawaii residential mortgage assets of $0.1 million.

Loans delinquent for 90 days or more still accruing interest totaled $0.3 million at December 31, 2015, compared to $0.1 million at September 30, 2015. In addition, loans delinquent for 30 days or more still accruing interest totaled $7.1 million at December 31, 2015, compared to $3.1 million at September 30, 2015.

Net charge-offs in the fourth quarter of 2015 totaled $1.4 million, compared to net charge-offs of $3.4 million in the fourth quarter of 2014, and net recoveries of $3.4 million in the third quarter of 2015. Net charge-offs during the fourth quarter of 2015 included a $0.9 million charge-off of a Hawaii commercial mortgage loan placed on nonaccrual status during the quarter.

The ALLL, as a percentage of total loans and leases, was 1.97% at December 31, 2015, compared to 2.15% at September 30, 2015. The ALLL, as a percentage of nonperforming assets, was 390.10% at December 31, 2015, compared to 475.99% at September 30, 2015. The ALLL, as a percentage of nonaccrual loans, was 443.75% at December 31, 2015, compared to 551.32% at September 30, 2015.

Capital Levels

At December 31, 2015, the Company’s leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 10.69%, 14.41%, 15.68%, and 12.79%, respectively. At September 30, 2015, the Company’s leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 10.87%, 15.00%, 16.27%, and 13.32%, respectively. The Company’s capital ratios continue to exceed the levels required to be considered a “well-capitalized” institution for regulatory purposes under Basel III.

Central Pacific Financial Corp. Reports $10.9 Million Fourth Quarter Earnings

January 28, 2016

Page 4

Non-GAAP Financial Measures

This press release contains certain references to financial measures that have been adjusted to exclude certain expenses and other specified items. These financial measures differ from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) in that they exclude unusual or non-recurring charges, losses, credits or gains. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Management believes that financial presentations excluding the impact of these items provide useful supplemental information that is important to a proper understanding of the Company’s core business results by investors. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies.

Conference Call

The Company’s management will host a conference call today at 1:00 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.centralpacificbank.com. Alternatively, investors may participate in the live call by dialing 1-877-505-7644. A playback of the call will be available through February 28, 2016 by dialing 1-877-344-7529 (passcode: 10078448) and on the Company’s website.

About Central Pacific Financial Corp.

Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $5.1 billion in assets. Central Pacific Bank, its primary subsidiary, operates 36 branches and 103 ATMs in the state of Hawaii, as of December 31, 2015. For additional information, please visit the Company’s website at http://www.centralpacificbank.com.

**********

Forward-Looking Statements

This document may contain forward-looking statements concerning projections of revenues, income/loss, earnings/loss per share, capital expenditures, dividends, capital structure, or other financial items, plans and objectives of management for future operations, future economic performance, or any of the assumptions underlying or relating to any of the foregoing. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts, and may include the words “believes,” “plans,” “expects,” “anticipates,” “forecasts,” “intends,” “hopes,” “should,” “estimates,” or words of similar meaning. While the Company believes that our forward-looking statements 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 materially differ from projections for a variety of reasons, to include, but not limited to: the effect of, and our failure to comply with any regulatory orders we are or may become subject to; oversupply of inventory and adverse conditions in the Hawaii and California real estate markets and any weakness 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 political events, acts of war or terrorism, natural disasters such as wildfires, tsunamis 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 economic conditions, including destabilizing factors in the financial industry and deterioration of the real estate market, as well as the impact from any declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular; our

Central Pacific Financial Corp. Reports $10.9 Million Fourth Quarter Earnings

January 28, 2016

Page 5

ability to continue making progress on our recovery plan; the impact of regulatory action on the Company and Central Pacific Bank and legislation affecting the banking industry; 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, other regulatory reform, and any related rules and regulations on our business operations and competitiveness; the costs and effects of legal and regulatory developments, including legal proceedings or regulatory or other governmental inquiries and proceedings and the resolution thereof, and the results of regulatory examinations or reviews; 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; inflation, interest rate, securities market and monetary fluctuations; negative trends in our market capitalization and adverse changes in the price of the Company’s common shares; changes in consumer spending, borrowings and savings habits; technological changes and developments; changes in the competitive environment among financial holding companies and other financial service providers; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; our ability to attract and retain skilled executives and employees; changes in our organization, compensation and benefit plans; and our success at managing the risks involved in any of the foregoing items. For further information on factors that could cause actual results to materially differ from projections, 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. The Company does not update any of its forward-looking statements except as required by law.



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Financial Highlights
(Unaudited)	TABLE 1



	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(dollars in thousands, except for per share amounts)	2015			2015			2014			2015			2014
INCOME STATEMENT
Net interest income	$	38,194		$	37,805		$	36,184		$	149,528		$	143,418
Provision (credit) for loan and lease losses	(1,958		)	(3,647		)	(5,371		)	(15,671		)	(6,414		)
Total other operating income	9,841			9,829			10,212			38,984			43,823
Total other operating expense	32,576			32,175			32,749			131,227			132,813
Net income	10,932			12,206			13,265			45,868			40,453
Basic earnings per common share	$	0.35		$	0.39		$	0.37		$	1.42		$	1.08
Diluted earnings per common share	0.34			0.38			0.37			1.40			1.07
Dividends declared per common share	0.46			0.12			0.10			0.82			0.36

PERFORMANCE RATIOS
Return on average assets (1)	0.87		%	0.98		%	1.11		%	0.92		%	0.85		%
Return on average shareholders’ equity (1)	8.68			9.91			9.28			8.91			6.80
Return on average tangible shareholders’ equity (1)	8.82			10.08			9.46			9.06			6.93
Efficiency ratio (2)	67.82			67.55			70.59			69.61			70.93
Net interest margin (1)	3.30			3.31			3.33			3.30			3.32
Dividend payout ratio (3)	135.29			31.58			27.03			58.57			33.64
Average shareholders’ equity to average assets	9.97			9.90			11.97			10.37			12.50

SELECTED AVERAGE BALANCES
Average loans and leases, including loans held for sale	$	3,142,895		$	3,070,384		$	2,914,253		$	3,038,100		$	2,798,826
Average interest-earning assets	4,676,931			4,611,234			4,397,741			4,590,686			4,380,314
Average assets	5,049,232			4,974,154			4,775,307			4,965,689			4,759,816
Average deposits	4,327,908			4,242,043			4,052,316			4,223,613			3,989,066
Average interest-bearing liabilities	3,370,560			3,346,484			3,148,376			3,335,445			3,175,510
Average shareholders’ equity	503,570			492,683			571,514			515,043			595,210
Average tangible shareholders' equity	495,845			484,246			561,117			506,295			583,794

							December 31,			September 30,			December 31,
(dollars in thousands, except for per share amounts)							2015			2015			2014
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp.
Leverage capital ratio							10.69		%	10.87		%	12.03		%
Tier 1 risk-based capital ratio							14.41			15.00			16.97
Total risk-based capital ratio							15.68			16.27			18.24
Common equity tier 1 capital ratio							12.79			13.32			N/A
Central Pacific Bank
Leverage capital ratio							10.42			10.51			11.57
Tier 1 risk-based capital ratio							14.05			14.51			16.33
Total risk-based capital ratio							15.32			15.78			17.59
Common equity tier 1 capital ratio							14.05			14.51			N/A



	December 31,			September 30,			December 31,
(dollars in thousands, except for per share amounts)	2015			2015			2014
BALANCE SHEET
Loans and leases	$	3,211,532		$	3,101,463		$	2,932,198
Total assets	5,131,288			5,021,833			4,852,987
Total deposits	4,433,439			4,230,503			4,110,300
Long-term debt	92,785			92,785			92,785
Total shareholders’ equity	494,614			503,261			568,041
Total shareholders’ equity to total assets	9.64		%	10.02		%	11.70		%
Tangible common equity to tangible assets (4)	9.51			9.88			11.52

ASSET QUALITY
Allowance for loan and lease losses	$	63,314		$	66,644		$	74,040
Non-performing assets	16,230			14,001			42,035
Allowance to loans and leases outstanding	1.97		%	2.15		%	2.53		%
Allowance to non-performing assets	390.10			475.99			176.14

PER SHARE OF COMMON STOCK
Book value per common share	$	15.77		$	16.06		$	16.12
Tangible book value per common share	15.54			15.81			15.84
Market value per common share	22.02			20.97			21.50

(1) Annualized

(2) Efficiency ratio is defined as total operating expense divided by total revenue (net interest income and total other operating income).

(3) Dividend payout ratio is defined as dividends declared per share divided by diluted earnings per share.

(4) The tangible common equity ratio is a non-GAAP measure which should be read in conjunction with the Company’s GAAP financial information. Comparison of our ratio with those of other companies may not be possible because other companies may calculate the ratio differently. See Reconciliation of Non-GAAP Financial Measures.



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)	TABLE 2



	December 31,			September 30,			December 31,
(Dollars in thousands)	2015			2015			2014
Tangible Common Equity Ratio:
Total shareholders’ equity	$	494,614		$	503,261		$	568,041
Less: Other intangible assets	(7,355		)	(8,023		)	(10,029		)
Tangible common equity	$	487,259		$	495,238		$	558,012

Total assets	$	5,131,288		$	5,021,833		$	4,852,987
Less: Other intangible assets	(7,355		)	(8,023		)	(10,029		)
Tangible assets	$	5,123,933		$	5,013,810		$	4,842,958

Tangible common equity to tangible assets	9.51		%	9.88		%	11.52		%



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)	TABLE 3



	December 31,			September 30,			December 31,
(Dollars in thousands, except share data)	2015			2015			2014
ASSETS
Cash and due from banks	$	71,797		$	69,628		$	72,316
Interest-bearing deposits in other banks	8,397			14,376			13,691
Investment securities:
Available for sale	1,272,255			1,272,382			1,229,018
Held to maturity (fair value of $244,136 at December 31, 2015,
$254,540 at September 30, 2015 and $235,597 at December 31, 2014)	247,917			254,719			238,287
Total investment securities	1,520,172			1,527,101			1,467,305
Loans held for sale	14,109			9,786			9,683
Loans and leases	3,211,532			3,101,463			2,932,198
Less allowance for loan and lease losses	63,314			66,644			74,040
Net loans and leases	3,148,218			3,034,819			2,858,158
Premises and equipment, net	49,161			47,822			49,214
Accrued interest receivable	14,898			13,779			13,584
Investment in unconsolidated subsidiaries	6,157			6,489			7,246
Other real estate	1,962			1,913			2,948
Mortgage servicing rights	17,797			18,174			19,668
Other intangible assets	7,355			8,023			10,029
Bank-owned life insurance	153,967			153,449			152,283
Federal Home Loan Bank stock	8,606			12,048			43,932
Other assets	108,692			104,426			132,930
Total assets	$	5,131,288		$	5,021,833		$	4,852,987
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand	$	1,145,244		$	1,112,761		$	1,034,146
Interest-bearing demand	824,895			785,936			788,272
Savings and money market	1,399,093			1,283,517			1,242,598
Time	1,064,207			1,048,289			1,045,284
Total deposits	4,433,439			4,230,503			4,110,300
Short-term borrowings	69,000			155,000			38,000
Long-term debt	92,785			92,785			92,785
Other liabilities	41,425			40,284			43,861
Total liabilities	4,636,649			4,518,572			4,284,946
Equity:
Preferred stock, no par value, authorized 1,100,000 shares; issued and outstanding none at December 31, 2015, September 30, 2015, and December 31, 2014	—			—			—
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 31,361,452 shares at December 31, 2015, 31,330,644 shares at September 30, 2015, and 35,233,674 shares at December 31, 2014	548,878			548,518			642,205
Surplus	82,847			81,528			79,716
Accumulated deficit	(137,314		)	(133,821		)	(157,039		)
Accumulated other comprehensive income (loss)	203			7,036			3,159
Total shareholders' equity	494,614			503,261			568,041
Non-controlling interest	25			—			—
Total equity	494,639			503,261			568,041
Total liabilities and equity	$	5,131,288		$	5,021,833		$	4,852,987



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)	TABLE 4



	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,
(Dollars in thousands, except per share data)	2015			2015			2014			2015			2014
Interest income:
Interest and fees on loans and leases	$	30,565		$	30,148		$	28,850		$	118,887		$	112,137
Interest and dividends on investment securities:
Taxable interest	8,282			8,260			7,858			32,969			33,574
Tax-exempt interest	1,006			1,008			1,000			4,022			3,996
Dividends	10			9			13			36			23
Interest on deposits in other banks	7			6			9			35			33
Dividends on Federal Home Loan Bank stock	46			11			11			86			46
Total interest income	39,916			39,442			37,741			156,035			149,809
Interest expense:
Interest on deposits:
Demand	101			104			96			399			373
Savings and money market	238			230			229			916			901
Time	647			568			573			2,312			2,453
Interest on short-term borrowings	59			73			10			254			92
Interest on long-term debt	677			662			649			2,626			2,572
Total interest expense	1,722			1,637			1,557			6,507			6,391
Net interest income	38,194			37,805			36,184			149,528			143,418
Provision (credit) for loan and lease losses	(1,958		)	(3,647		)	(5,371		)	(15,671		)	(6,414		)
Net interest income after provision for loan and lease losses	40,152			41,452			41,555			165,199			149,832
Other operating income:
Service charges on deposit accounts	1,999			1,947			2,061			7,829			8,113
Loan servicing fees	1,399			1,407			1,460			5,656			5,798
Other service charges and fees	2,772			2,803			2,842			11,461			11,754
Income from fiduciary activities	825			854			865			3,343			3,552
Equity in earnings of unconsolidated subsidiaries	88			165			58			578			480
Fees on foreign exchange	98			126			113			450			464
Investment securities gains (losses)	—			—			—			(1,866		)	240
Income from bank-owned life insurance	465			434			676			2,034			2,922
Loan placement fees	146			202			81			720			437
Net gains on sales of residential loans	1,332			1,551			1,394			6,107			5,545
Net gains on sales of foreclosed assets	189			252			9			568			971
Other (refer to Table 5)	528			88			653			2,104			3,547
Total other operating income	9,841			9,829			10,212			38,984			43,823
Other operating expense:
Salaries and employee benefits	16,895			17,193			17,405			66,429			67,941
Net occupancy	3,981			3,547			3,877			14,432			15,252
Equipment	858			775			888			3,475			3,582
Amortization of other intangible assets	1,512			1,683			1,446			6,859			5,332
Communication expense	822			895			942			3,483			3,635
Legal and professional services	1,671			1,808			1,980			7,340			7,806
Computer software expense	2,067			2,286			1,735			8,831			6,327
Advertising expense	964			502			305			2,550			2,342
Foreclosed asset expense	154			3			267			486			1,710
Other (refer to Table 6)	3,652			3,483			3,904			17,342			18,886
Total other operating expense	32,576			32,175			32,749			131,227			132,813
Income before income taxes	17,417			19,106			19,018			72,956			60,842
Income tax expense	6,485			6,900			5,753			27,088			20,389
Net income	$	10,932		$	12,206		$	13,265		$	45,868		$	40,453
Per common share data:
Basic earnings per share	$	0.35		$	0.39		$	0.37		$	1.42		$	1.08
Diluted earnings per share	0.34			0.38			0.37			1.40			1.07
Cash dividends declared	0.46			0.12			0.10			0.82			0.36
Basic weighted average shares outstanding	31,318			31,331			35,653			32,238			37,366
Diluted weighted average shares outstanding	31,726			31,750			36,275			32,651			37,936



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Other Operating Income - Other
(Unaudited)	TABLE 5



	Three Months Ended								Year Ended
	December 31,		September 30,			December 31,			December 31,			December 31,
(Dollars in thousands)	2015		2015			2014			2015			2014
Income recovered on nonaccrual loans previously charged-off	$	104	$	262		$	302		$	794		$	1,436
Other recoveries	17		244			66			550			672
Unrealized gains (losses) on loans-held-for-sale and interest rate locks	54		(646		)	(125		)	(324		)	293
Commissions on sale of checks	79		86			83			325			336
Other	274		142			327			759			810
Total other operating income - Other	$	528	$	88		$	653		$	2,104		$	3,547



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Other Operating Expense - Other
(Unaudited)	TABLE 6



	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(Dollars in thousands)	2015			2015			2014			2015			2014
Charitable contributions	$	103		$	179		$	104		$	2,559		$	565
FDIC insurance assessment	622			685			730			2,706			2,848
Miscellaneous loan expenses	325			314			319			1,348			1,083
ATM and debit card expenses	407			365			366			1,538			1,566
Amortization of investments in low-income housing tax credit partnerships	258			258			298			1,078			1,363
Armored car expenses	254			213			214			896			864
Entertainment and promotions	405			191			336			1,059			968
Stationery and supplies	230			381			247			1,026			1,026
Directors’ fees and expenses	101			156			113			662			795
Provision (credit) for residential mortgage loan repurchase losses	(596		)	(883		)	(75		)	(1,352		)	467
Increase (decrease) to the reserve for unfunded commitments	(223		)	255			—			(271		)	(373		)
Other	1,766			1,369			1,252			6,093			7,714
Total other operating expense - Other	$	3,652		$	3,483		$	3,904		$	17,342		$	18,886



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
(Unaudited)	TABLE 7



	Three Months Ended						Three Months Ended						Three Months Ended
	December 31, 2015						September 30, 2015						December 31, 2014
	Average		Average				Average		Average				Average		Average
	Balance		Yield/Rate		Interest		Balance		Yield/Rate		Interest		Balance		Yield/Rate		Interest
ASSETS
Interest earning assets:
Interest-bearing deposits in other banks	$	10,504	0.27	%	$	7	$	10,277	0.23	%	$	6	$	14,321	0.24	%	$	9
Taxable investment securities, excluding valuation allowance	1,339,764		2.48		8,292		1,345,120		2.46		8,269		1,246,840		2.53		7,871
Tax-exempt investment securities, excluding valuation allowance	174,681		3.54		1,547		175,340		3.54		1,551		177,998		3.46		1,539
Loans and leases, including loans held for sale	3,142,895		3.87		30,565		3,070,384		3.91		30,148		2,914,253		3.94		28,850
Federal Home Loan Bank stock	9,087		2.00		46		10,113		0.42		11		44,329		0.10		11
Total interest earning assets	4,676,931		3.45		40,457		4,611,234		3.46		39,985		4,397,741		3.47		38,280
Nonearning assets	372,301						362,920						377,566
Total assets	$	5,049,232					$	4,974,154					$	4,775,307

LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits	$	804,544	0.05	%	$	101	$	803,682	0.05	%	$	104	$	791,811	0.05	%	$	96
Savings and money market deposits	1,322,220		0.07		238		1,277,480		0.07		230		1,244,699		0.07		229
Time deposits under $100,000	218,188		0.36		201		223,550		0.36		203		245,209		0.42		261
Time deposits $100,000 and over	851,796		0.21		446		842,362		0.17		365		760,706		0.16		312
Short-term borrowings	81,027		0.29		59		106,625		0.27		73		13,166		0.31		10
Long-term debt	92,785		2.90		677		92,785		2.83		662		92,785		2.77		649
Total interest-bearing liabilities	3,370,560		0.20		1,722		3,346,484		0.19		1,637		3,148,376		0.20		1,557
Noninterest-bearing deposits	1,131,160						1,094,969						1,009,891
Other liabilities	43,941						40,018						45,526
Total liabilities	4,545,661						4,481,471						4,203,793
Shareholders’ equity	503,570						492,683						571,514
Non-controlling interest	1						—						—
Total equity	503,571						492,683						571,514
Total liabilities and equity	$	5,049,232					$	4,974,154					$	4,775,307

Net interest income					$	38,735					$	38,348					$	36,723

Net interest margin			3.30	%					3.31	%					3.33	%



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
(Unaudited)	TABLE 8



	Year Ended						Year Ended
	December 31, 2015						December 31, 2014
	Average		Average				Average		Average
	Balance		Yield/Rate		Interest		Balance		Yield/Rate		Interest
ASSETS
Interest earning assets:
Interest-bearing deposits in other banks	$	13,966	0.25	%	$	35	$	13,207	0.25	%	$	33
Taxable investment securities, excluding valuation allowance	1,339,070		2.46		33,005		1,344,821		2.50		33,597
Tax-exempt investment securities, excluding valuation allowance	175,919		3.52		6,188		178,275		3.45		6,148
Loans and leases, including loans held for sale	3,038,100		3.91		118,887		2,798,826		4.01		112,137
Federal Home Loan Bank stock	23,631		0.36		86		45,185		0.10		46
Total interest earning assets	4,590,686		3.45		158,201		4,380,314		3.47		151,961
Nonearning assets	375,003						379,502
Total assets	$	4,965,689					$	4,759,816

LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits	$	802,121	0.05	%	$	399	$	764,504	0.05	%	$	373
Savings and money market deposits	1,276,830		0.07		916		1,227,049		0.07		901
Time deposits under $100,000	227,288		0.37		838		254,572		0.42		1,069
Time deposits $100,000 and over	844,376		0.17		1,474		804,863		0.17		1,384
Short-term borrowings	92,045		0.28		254		31,732		0.29		92
Long-term debt	92,785		2.83		2,626		92,790		2.77		2,572
Total interest-bearing liabilities	3,335,445		0.20		6,507		3,175,510		0.20		6,391
Noninterest-bearing deposits	1,072,998						938,078
Other liabilities	42,203						51,003
Total liabilities	4,450,646						4,164,591
Shareholders’ equity	515,043						595,210
Non-controlling interest	—						15
Total equity	515,043						595,225
Total liabilities and equity	$	4,965,689					$	4,759,816

Net interest income					$	151,694					$	145,570

Net interest margin			3.30	%					3.32	%



CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Loans and Leases by Geographic Distribution
(Unaudited)	TABLE 9



	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands)	2015			2015			2015			2015			2014
HAWAII:
Commercial, financial and agricultural	$	339,738		$	335,919		$	341,468		$	318,228		$	287,254
Real estate:
Construction	81,655			72,071			80,168			109,256			111,010
Mortgage:
- residential	1,436,305			1,385,286			1,351,962			1,300,304			1,282,324
- commercial	642,845			616,085			588,334			586,281			587,322
Consumer	273,248			263,568			254,655			249,151			254,259
Leases	1,028			1,123			2,589			2,885			3,140
Total loans and leases	2,774,819			2,674,052			2,619,176			2,566,105			2,525,309
Allowance for loan and lease losses	(54,141		)	(56,150		)	(57,402		)	(60,676		)	(62,685		)
Net loans and leases	$	2,720,678		$	2,617,902		$	2,561,774		$	2,505,429		$	2,462,624

U.S. MAINLAND:
Commercial, financial and agricultural	$	181,348		$	170,624		$	158,133		$	182,455		$	176,509
Real estate:
Construction	3,230			3,309			3,387			3,465			3,544
Mortgage:
- residential	—			—			—			—			—
- commercial	117,904			120,900			106,859			114,975			115,951
Consumer	134,231			132,578			118,500			100,772			110,885
Leases	—			—			—			—			—
Total loans and leases	436,713			427,411			386,879			401,667			406,889
Allowance for loan and lease losses	(9,173		)	(10,494		)	(9,522		)	(10,757		)	(11,355		)
Net loans and leases	$	427,540		$	416,917		$	377,357		$	390,910		$	395,534

TOTAL:
Commercial, financial and agricultural	$	521,086		$	506,543		$	499,601		$	500,683		$	463,763
Real estate:
Construction	84,885			75,380			83,555			112,721			114,554
Mortgage:
- residential	1,436,305			1,385,286			1,351,962			1,300,304			1,282,324
- commercial	760,749			736,985			695,193			701,256			703,273
Consumer	407,479			396,146			373,155			349,923			365,144
Leases	1,028			1,123			2,589			2,885			3,140
Total loans and leases	3,211,532			3,101,463			3,006,055			2,967,772			2,932,198
Allowance for loan and lease losses	(63,314		)	(66,644		)	(66,924		)	(71,433		)	(74,040		)
Net loans and leases	$	3,148,218		$	3,034,819		$	2,939,131		$	2,896,339		$	2,858,158



CENTRAL PACIFIC FINANCIAL CORP AND SUBSIDIARIES
Nonperforming Assets, Past Due and Restructured Loans
(Unaudited)	TABLE 10



	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands)	2015			2015			2015			2015			2014
Nonaccrual loans (including loans held for sale):
Commercial, financial and agricultural	$	1,044		$	3,056		$	3,175		$	13,377		$	13,007
Real estate:
Construction	—			—			133			146			310
Mortgage-residential	6,130			6,301			10,032			11,430			13,048
Mortgage-commercial	7,094			2,731			13,490			12,468			12,722
Total nonaccrual loans	14,268			12,088			26,830			37,421			39,087

Other real estate:
Real estate:
Construction	—			—			—			—			747
Mortgage-residential	1,962			1,913			2,433			3,349			2,201
Mortgage-commercial	—			—			2,845			—			—
Total other real estate	1,962			1,913			5,278			3,349			2,948
Total nonperforming assets ("NPAs")	16,230			14,001			32,108			40,770			42,035

Loans delinquent for 90 days or more:
Consumer	273			130			45			5			77
Leases	—			—			—			—			—
Total loans delinquent for 90 days or more	273			130			45			5			77
Restructured loans still accruing interest:
Commercial, financial and agricultural	—			327			339			350			361
Real estate:
Construction	809			841			839			866			892
Mortgage-residential	16,224			17,592			16,428			17,084			17,845
Mortgage-commercial	3,224			2,253			1,360			1,516			10,405
Total restructured loans still accruing interest	20,257			21,013			18,966			19,816			29,503
Total NPAs, loans delinquent for 90 days or more and restructured loans still accruing interest	$	36,760		$	35,144		$	51,119		$	60,591		$	71,615

Total nonaccrual loans as a percentage of loans and leases	0.44		%	0.39		%	0.89		%	1.26		%	1.33		%
Total NPAs as a percentage of loans and leases and other real estate	0.51		%	0.45		%	1.07		%	1.37		%	1.43		%
Total NPAs and loans delinquent for 90 days or more as a percentage of loans and leases and other real estate	0.51		%	0.46		%	1.07		%	1.37		%	1.43		%
Total NPAs, loans delinquent for 90 days or more, and restructured loans still accruing interest as a percentage of loans and leases and other real estate	1.14		%	1.13		%	1.70		%	2.04		%	2.44		%

Quarter-to-quarter changes in NPAs:
Balance at beginning of quarter	$	14,001		$	32,108		$	40,770		$	42,035		$	45,292
Additions	2,992			681			6,761			1,429			1,986
Reductions
Payments	(439		)	(4,002		)	(3,411		)	(1,712		)	(843		)
Return to accrual status	(216		)	(10,799		)	(274		)	(197		)	(190		)
Sales of NPAs	(71		)	(4,007		)	(8,280		)	(949		)	(1,444		)
Charge-offs/valuation adjustments	(37		)	20			(3,458		)	164			(2,766		)
Total reductions	(763		)	(18,788		)	(15,423		)	(2,694		)	(5,243		)
Balance at end of quarter	$	16,230		$	14,001		$	32,108		$	40,770		$	42,035



CENTRAL PACIFIC FINANCIAL CORP AND SUBSIDIARIES
Allowance for Loan and Lease Losses
(Unaudited)	TABLE 11



	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(Dollars in thousands)	2015			2015			2014			2015			2014
Allowance for loan and lease losses:
Balance at beginning of period	$	66,644		$	66,924		$	82,838		$	74,040		$	83,820

Provision (credit) for loan and lease losses	(1,958		)	(3,647		)	(5,371		)	(15,671		)	(6,414		)

Charge-offs:
Commercial, financial and agricultural	554			170			3,083			5,658			5,046
Real estate:
Mortgage-residential	—			46			—			110			139
Mortgage-commercial	838			—			—			838			1,041
Consumer	721			874			1,461			4,650			3,703
Leases	—			—			—			—			8
Total charge-offs	2,113			1,090			4,544			11,256			9,937

Recoveries:
Commercial, financial and agricultural	411			504			397			4,788			2,326
Real estate:
Construction	10			283			196			880			2,040
Mortgage-residential	96			196			125			2,177			992
Mortgage-commercial	14			3,130			13			6,719			53
Consumer	210			317			384			1,610			1,152
Leases	—			27			2			27			8
Total recoveries	741			4,457			1,117			16,201			6,571
Net charge-offs (recoveries)	1,372			(3,367		)	3,427			(4,945		)	3,366
Balance at end of period	$	63,314		$	66,644		$	74,040		$	63,314		$	74,040

Average loans and leases, net of unearned	$	3,142,895		$	3,070,384		$	2,914,253		$	3,038,100		$	2,798,826

Annualized ratio of net recoveries to average loans and leases	0.17		%	(0.44		)%	0.47		%	(0.16		)%	0.12		%

Ratio of allowance for loan and lease losses to loans and leases	1.97		%	2.15		%	2.53		%	1.97		%	2.53		%