EX-99.1 2 a16-15565_1ex99d1.htm EX-99.1

Exhibit 99.1

			FOR IMMEDIATE RELEASE
Investor Contact:	Isaac Okita	Media Contact:	Wayne Kirihara
	VP, Treasury Manager		SVP, Chief Marketing Officer
	(808) 544-3626		(808) 544-3687
	isaac.okita@centralpacificbank.com		wayne.kirihara@centralpacificbank.com

NEWS RELEASE

CENTRAL PACIFIC FINANCIAL CORP. REPORTS $12.1 MILLION

SECOND QUARTER EARNINGS AND INCREASES QUARTERLY DIVIDEND

HONOLULU, HI, July 28, 2016 – Central Pacific Financial Corp. (NYSE: CPF), (the “Company”), today reported net income for the second quarter of 2016 of $12.1 million, or $0.39 per diluted share, compared to net income in the second quarter of 2015 of $12.3 million, or $0.39 per diluted share, and net income in the first quarter of 2016 of $11.2 million, or $0.35 per diluted share.

“We continued to realize solid core earnings for the quarter, primarily driven by the strong growth in our loan portfolio,” said Catherine Ngo, President and Chief Executive Officer.  “We are pleased to be in a position to continue to return excess capital to our shareholders with the increase in our quarterly cash dividend and our ongoing stock repurchase program.”

On July 27, 2016, the Company’s Board of Directors declared a quarterly cash dividend of $0.16 per share on the Company’s outstanding common shares. This represents a 14.3% increase from the $0.14 dividend paid in the second quarter of 2016. The dividend will be payable on September 15, 2016 to shareholders of record at the close of business on August 31, 2016.

During the second quarter of 2016, the Company repurchased 259,200 shares of common stock at a total cost of $5.8 million. The average cost per share was $22.36. During the six months ended June 30, 2016, the Company repurchased a total of 492,922 shares of common stock, or approximately 1.6% of its common stock outstanding as of December 31, 2015 for a total cost of $10.5 million. The Company’s remaining repurchase authority under its common stock repurchase program at June 30, 2016 was $19.5 million.

Since reinstating quarterly cash dividends in 2013, the Company has returned over $300 million in cash to its shareholders, in the form of cash dividends totaling $55.0 million, and through the repurchase of 11,661,423 shares of common stock at a total cost of $245.3 million, excluding fees and expenses.

Central Pacific Financial Corp. Reports $12.1 Million Second Quarter Earnings

July 28, 2016

Page 2

Significant Highlights and Second Quarter Results

· Reported net income of $12.1 million, compared to net income in the second quarter of 2015 of $12.3 million and net income in the first quarter of 2016 of $11.2 million.

· Loans and leases increased by $397.9 million, or 13.2% from the prior year period, and increased by $95.0 million, or 2.9%, during the quarter to $3.40 billion at June 30, 2016, with growth in our commercial mortgage, residential mortgage, and consumer loan portfolios of $69.5 million, $42.6 million, and $16.9 million, respectively, partially offset by a decrease in the commercial loan portfolio of $31.0 million.

· Total deposits increased by $222.8 million, or 5.3% from the prior year period, but decreased by $91.5 million, or 2.0% during the quarter to $4.41 billion at June 30, 2016. Core deposits increased by $196.5 million, or 5.8% from the prior year period, but decreased by $90.8 million, or 2.5% during the quarter to $3.57 billion at June 30, 2016.

· Net interest income increased to $39.6 million from $37.3 million in second quarter of 2015 and $39.2 million in the first quarter of 2016. Reported a net interest margin of 3.29%, compared to 3.32% in the prior year period and 3.33% in the first quarter of 2016.

· Recorded a credit to the provision for loan and lease losses of $1.4 million in the second quarter of 2016, compared to a credit of $7.3 million in the second quarter of 2015 and a credit of $0.7 million in the first quarter of 2016.

· Reported an efficiency ratio of 66.69% in the second quarter of 2016, compared to 71.47% in the second quarter of 2015 and 66.58% in the first quarter of 2016.

· Nonperforming assets decreased by $1.0 million to $14.9 million, or 0.28% of total assets at June 30, 2016, from $15.9 million, or 0.30% of total assets at March 31, 2016.

· Maintained a strong capital position with leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios at the holding company of 10.8%, 14.6%, 15.9%, and 12.5%, respectively, as of June 30, 2016. Central Pacific Bank also maintained a strong capital position with leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios of 10.2%, 13.8%, 15.1%, and 13.8%, respectively, as of June 30, 2016. The Company and the Bank’s capital ratios continue to be in excess of the levels required for a “well-capitalized” regulatory designation under Basel III.

Earnings Highlights

Net interest income for the second quarter of 2016 was $39.6 million, compared to $37.3 million in the year-ago quarter and $39.2 million in the first quarter of 2016.  Net interest margin was 3.29%, compared to 3.32% in the year-ago quarter and 3.33% in the first quarter of 2016. The increase in net interest income from the year-ago quarter was primarily attributable to average loan portfolio balances increasing by $396.2 million. This increase was partially offset by a 6 basis point decrease in average yields earned on loan portfolio balances, combined with a 5 basis point increase in rates paid on our average total interest-bearing deposits, both of which contributed to the decrease in the net interest margin from the year-ago quarter. The sequential quarter increase in net interest income was primarily attributable to average loan portfolio balances increasing by $118.5 million. In addition, total average interest-bearing deposits declined by $31.2 million. The sequential quarter decrease in the net interest margin was primarily attributable to a 9 basis point decrease in average yields earned on investment securities portfolio balances due to higher premium amortization on mortgage backed securities.

In the second quarter of 2016, a credit to the provision for loan and lease losses of $1.4 million was recorded, compared to a credit of $7.3 million in the year-ago quarter and a credit of $0.7 million in the first quarter of 2016.

Central Pacific Financial Corp. Reports $12.1 Million Second Quarter Earnings

July 28, 2016

Page 3

Other operating income for the second quarter of 2016 totaled $11.7 million, compared to $8.1 million in the year-ago quarter and $10.2 million in the first quarter of 2016. The increase from the year-ago quarter was primarily due to investment securities losses of $1.9 million recorded in the year-ago quarter, and higher income from bank-owned life insurance of $0.8 million recorded in the current quarter. The investment securities losses recorded in the year-ago quarter was attributable to the sale of $119.4 million in available-for-sale securities which were sold as part of an investment portfolio repositioning designed to improve profitability. The higher income from bank-owned life insurance was primarily attributable to death benefit proceeds of $0.5 million received in the current quarter. The sequential quarter increase was primarily due to higher income from bank-owned life insurance of $0.6 million, higher net gain on sales of residential mortgage loans of $0.4 million, and higher other service charges and fees of $0.3 million. The higher net gain on sales of residential mortgage loans was attributable to a $64.7 million increase in residential mortgage origination volume compared to the prior quarter.

Other operating expense for the second quarter of 2016 totaled $34.2 million, compared to $32.5 million in the year-ago quarter and $32.9 million in the first quarter of 2016. The increase from the year-ago quarter was primarily attributable to higher salaries and employee benefits of $2.7 million and higher amortization of mortgage servicing rights of $0.9 million. The higher salaries and employee benefits in the current quarter was primarily attributable to a one-time reversal of an accrual totaling $2.4 million in the year-ago quarter related to a former executive officer’s retirement benefits which were not paid. The higher amortization of mortgage servicing rights was primarily attributable to the decline in long-term market interest rates experienced near the end of the quarter. These increases were partially offset by a $2.0 million charitable contribution to the Central Pacific Bank Foundation (included in other) in the year-ago quarter. The sequential quarter increase was primarily due to higher salaries and employee benefits of $0.9 million, a lower credit to the reserve for residential mortgage loan repurchase losses of $0.3 million (included in other), and higher amortization of mortgage servicing rights and net occupancy expense of $0.2 million each. Salaries and employee benefits in the second quarter of 2016 included a $0.4 million increase in our accrual related to our current year incentive compensation plan, while salaries and benefits in the first quarter of 2016 included a $0.5 million reversal of our accrual related to our 2015 incentive compensation plan. These higher expenses were partially offset by lower computer software expense of $0.5 million and lower advertising expense of $0.2 million.

The efficiency ratio for the second quarter of 2016 was 66.69%, an improvement from 71.47% in the year-ago quarter and consistent with 66.58% in the first quarter of 2016. The decrease in the efficiency ratio from the year-ago quarter was attributable to the growth in net interest income, combined with the increase in other operating income, offset by higher other operating expenses in the current quarter as described above. On a sequential quarter basis, the efficiency ratio remained stable as the increase in other operating expenses was largely offset by higher net interest income and higher other operating income.

In the second quarter of 2016, the Company recorded income tax expense of $6.3 million, compared to income tax expense of $7.9 million in the year-ago quarter and $6.1 million in the first quarter of 2016. The effective tax rate for the second quarter of 2016 was 34.3%, compared to 39.2% in the year-ago quarter and 35.2% in the first quarter of 2016. The sequential quarter decline in the effective tax rate was primarily attributable to the $0.5 million in death benefit proceeds from bank-owned life insurance which is tax-exempt. The decrease from the year-ago quarter was primarily driven by $0.6 million in additional tax expense incurred in the second quarter of 2015 due to the redemption of FHLB stock. As of June 30, 2016, the Company’s net deferred tax assets totaled $58.3 million, compared to $94.2 million and $67.9 million at June 30, 2015 and March 31, 2016, respectively. The decrease in the net deferred tax assets is primarily due to utilization of net operating loss carryforwards to offset taxable income.

Balance Sheet Highlights

Total assets at June 30, 2016, of $5.28 billion increased by $315.1 million from June 30, 2015, and increased by $40.8 million from March 31, 2016.

Central Pacific Financial Corp. Reports $12.1 Million Second Quarter Earnings

July 28, 2016

Page 4

Total loans and leases at June 30, 2016 of $3.40 billion increased by $397.9 million and $95.0 million from June 30, 2015 and March 31, 2016, respectively.  The increase in total loans and leases from June 30, 2015 was primarily due to an increase in the commercial, construction, residential mortgage, commercial mortgage, and consumer loan portfolios of $4.5 million, $14.9 million, $149.8 million, $147.4 million, and $83.1 million, respectively. The increase in total loans and leases from the first quarter of 2016 was primarily due to an increase in the residential mortgage, commercial mortgage, and consumer loan portfolios of $42.6 million, $69.5 million, and $16.9 million, respectively, partially offset by a decrease in the commercial and construction loan portfolios of $31.0 million and $2.9 million, respectively.

Total deposits at June 30, 2016 of $4.41 billion increased by $222.8 million from June 30, 2015, but decreased by $91.5 million from March 31, 2016.  Core deposits, which include demand deposits, savings and money market deposits, and time deposits less than $100,000, totaled $3.57 billion at June 30, 2016.  This represents an increase of $196.5 million from June 30, 2015 but a decrease of $90.8 million from March 31, 2016.  Changes in total deposits from June 30, 2015 included net increases in savings and money market deposits of $110.0 million, noninterest-bearing demand deposits of $72.2 million, interest-bearing demand deposits of $38.7 million, and time deposits $100,000 and over of $26.3 million, offset by a decrease in time deposits less than $100,000 of $24.4 million. Changes in total deposits during the quarter included net decreases in savings and money market deposits of $94.4 million and interest-bearing demand deposits of $3.3 million, offset by net decreases in time deposits $100,000 and over of $0.7 million, time deposits less than $100,000 of $5.0 million, and noninterest-bearing demand deposits of $11.9 million.

Total shareholders’ equity was $517.6 million at June 30, 2016, compared to $488.8 million and $509.4 million at June 30, 2015 and March 31, 2016, respectively. The sequential quarter increase reflects net income of $12.1 million and an increase in unrealized gains on investment securities of $5.9 million, partially offset by repurchases of common stock under the Company’s common stock repurchase program of $5.8 million and common stock dividends paid of $4.4 million.

Asset Quality

Nonperforming assets at June 30, 2016 totaled $14.9 million, or 0.28% of total assets, compared to $32.1 million, or 0.65% of total assets at June 30, 2015, and $15.9 million, or 0.30% of total assets at March 31, 2016.  The sequential-quarter decrease in nonperforming assets reflects the return of two Hawaii commercial mortgage loans to accrual status totaling $3.7 million and the sale of two Hawaii residential mortgage assets totaling $0.9 million, partially offset by the addition of nine Hawaii residential mortgage loans totaling $3.9 million to nonaccrual status.

Loans delinquent for 90 days or more still accruing interest totaled $0.3 million at June 30, 2016, compared to $45 thousand and $0.8 million at June 30, 2015 and March 31, 2016, respectively.  In addition, loans delinquent for 30 days or more still accruing interest totaled $4.1 million at June 30, 2016, compared to $2.8 million at June 30, 2015 and $7.4 million at March 31, 2016.

Net charge-offs in the second quarter of 2016 totaled $3 thousand, compared to net recoveries of $2.8 million in the second quarter of 2015, and net charge-offs of $0.4 million in the first quarter of 2016.

The ALLL, as a percentage of total loans and leases, was 1.79% at June 30, 2016, compared to 2.23% at June 30, 2015 and 1.88% at March 31, 2016.  The ALLL, as a percentage of nonperforming assets, was 407.62% at June 30, 2016, compared to 208.43% at June 30, 2015 and 389.80% at March 31, 2016.  The ALLL, as a percentage of nonaccrual loans, was 437.94% at June 30, 2016, compared to 249.44% at June 30, 2015 and 423.24% at March 31, 2016.

Capital Levels

At June 30, 2016, the Company’s leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 10.8%, 14.6%, 15.9%, and 12.5%, respectively.  At March 31, 2016, the Company’s leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 10.8%, 14.5%, 15.8%, and 12.5%, 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 $12.1 Million Second Quarter Earnings

July 28, 2016

Page 5

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 (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.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 August 28, 2016 by dialing 1-877-344-7529 (passcode: 10089321) and on the Company’s website.

About Central Pacific Financial Corp.

Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $5.3 billion in assets.  Central Pacific Bank, its primary subsidiary, operates 35 branches and 103 ATMs in the state of Hawaii, as of June 30, 2016.  For additional information, please visit the Company’s website at http://www.centralpacificbank.com.

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Central Pacific Financial Corp. Reports $12.1 Million Second Quarter Earnings

July 28, 2016

Page 6

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 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																				Six Months Ended
(Dollars in thousands,		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,				Jun 30,
except for per share amounts)		2016				2016				2015				2015				2015				2016				2015
CONDENSED INCOME STATEMENT
Net interest income		$	39,609			$	39,211			$	38,194			$	37,805			$	37,294			$	78,820			$	73,529
Provision (credit) for loan and lease losses		(1,382		)		(747		)		(1,958		)		(3,647		)		(7,319		)		(2,129		)		(10,066		)
Net interest income after provision (credit) for loan and lease losses		40,991				39,958				40,152				41,452				44,613				80,949				83,595
Total other operating income		11,692				10,165				9,841				9,829				8,124				21,857				19,314
Total other operating expense		34,215				32,875				32,576				32,175				32,458				67,090				66,476
Income before taxes		18,468				17,248				17,417				19,106				20,279				35,716				36,433
Income tax expense		6,331				6,067				6,485				6,900				7,944				12,398				13,703
Net income		12,137				11,181				10,932				12,206				12,335				23,318				22,730
Basic earnings per common share		$	0.39			$	0.36			$	0.35			$	0.39			$	0.39			$	0.75			$	0.69
Diluted earnings per common share		0.39				0.35				0.34				0.38				0.39				0.74				0.68
Dividends declared per common share (1)		0.14				0.14				0.46				0.12				0.12				0.28				0.24
PERFORMANCE RATIOS
Return on average assets (2)		0.93		%		0.87		%		0.87		%		0.98		%		1.00		%		0.90		%		0.92		%
Return on average shareholders’ equity (2)		9.51				8.85				8.68				9.91				9.93				9.18				8.54
Efficiency ratio (3)		66.69				66.58				67.82				67.55				71.47				66.64				71.60
Net interest margin (2)		3.29				3.33				3.30				3.31				3.32				3.31				3.30
Dividend payout ratio (1) (4)		35.90				40.00				135.29				31.58				30.77				37.84				35.29
Average shareholders’ equity to average assets		9.73				9.81				9.97				9.90				10.04				9.77				10.82
SELECTED AVERAGE BALANCES
Average loans and leases, including loans held for sale		$	3,377,362			$	3,258,872			$	3,142,895			$	3,070,384			$	2,981,184			$	3,318,117			$	2,968,425
Average interest-earning assets		4,890,398				4,786,256				4,676,931				4,611,234				4,566,577				4,838,327				4,536,404
Average assets		5,248,088				5,148,744				5,049,232				4,974,154				4,947,802				5,198,416				4,918,923
Average deposits		4,459,019				4,468,070				4,327,908				4,242,043				4,198,758				4,463,544				4,161,234
Average interest-bearing liabilities		3,565,530				3,492,748				3,370,560				3,346,484				3,357,400				3,529,139				3,311,986
Average shareholders’ equity		510,753				505,330				503,570				492,683				496,881				508,041				532,239

								Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,
(dollars in thousands)								2016				2016				2015				2015				2015
REGULATORY CAPITAL
Central Pacific Financial Corp.
Leverage capital								$	560,674			$	547,195			$	532,787			$	533,984			$	508,699
Tier 1 risk-based capital								560,674				547,195				532,787				533,984				508,699
Total risk-based capital								609,012				594,801				579,651				579,182				552,999
Common equity tier 1 capital								481,209				472,171				472,698				474,169				460,004
Central Pacific Bank
Leverage capital								529,754				533,307				518,617				515,625				501,732
Tier 1 risk-based capital								529,754				533,307				518,617				515,625				501,732
Total risk-based capital								577,966				580,715				565,231				560,569				546,005
Common equity tier 1 capital								529,754				533,307				518,617				515,625				501,732
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp.
Leverage capital ratio								10.8		%		10.8		%		10.7		%		10.9		%		10.5		%
Tier 1 risk-based capital ratio								14.6				14.5				14.4				15.0				14.5
Total risk-based capital ratio								15.9				15.8				15.7				16.3				15.7
Common equity tier 1 capital ratio								12.5				12.5				12.8				13.3				13.1
Central Pacific Bank
Leverage capital ratio								10.2				10.5				10.4				10.5				10.3
Tier 1 risk-based capital ratio								13.8				14.2				14.1				14.5				14.3
Total risk-based capital ratio								15.1				15.4				15.3				15.8				15.5
Common equity tier 1 capital ratio								13.8				14.2				14.1				14.5				14.3
								Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,
(dollars in thousands, except for per share amounts)								2016				2016				2015				2015				2015
BALANCE SHEET
Loans and leases								$	3,403,947			$	3,308,968			$	3,211,532			$	3,101,463			$	3,006,055
Total assets								5,282,967				5,242,202				5,131,288				5,021,833				4,967,851
Total deposits								4,405,142				4,496,602				4,433,439				4,230,503				4,182,322
Long-term debt								92,785				92,785				92,785				92,785				92,785
Total shareholders’ equity								517,607				509,358				494,614				503,261				488,847
Total shareholders’ equity to total assets								9.80		%		9.72		%		9.64		%		10.02		%		9.84		%
Tangible common equity to tangible assets (5)								9.69		%		9.60		%		9.51		%		9.88		%		9.68		%
ASSET QUALITY
Allowance for loan and lease losses								$	60,764			$	62,149			$	63,314			$	66,644			$	66,924
Non-performing assets								14,907				15,944				16,230				14,001				32,108
Allowance to loans and leases outstanding								1.79		%		1.88		%		1.97		%		2.15		%		2.23		%
Allowance to non-performing assets								407.62				389.80				390.10				475.99				208.43
PER SHARE OF COMMON STOCK
Book value per common share								$	16.68			$	16.34			$	15.77			$	16.06			$	15.52
Tangible book value per common share								16.48				16.13				15.54				15.81				15.24
Closing market price per common share								23.60				21.77				22.02				20.97				23.75

(1) Dividends declared in the fourth quarter of 2015 include a special cash dividend of $0.32 per share.

(2) Annualized.

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

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

(5) 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 in Table 2.

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

		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands)		2016				2016				2015				2015				2015
Tangible Common Equity Ratio:
Total shareholders’ equity		$	517,607			$	509,358			$	494,614			$	503,261			$	488,847
Less: Other intangible assets		(6,018		)		(6,686		)		(7,355		)		(8,023		)		(8,692		)
Tangible common equity		$	511,589			$	502,672			$	487,259			$	495,238			$	480,155
Total assets		$	5,282,967			$	5,242,202			$	5,131,288			$	5,021,833			$	4,967,851
Less: Other intangible assets		(6,018		)		(6,686		)		(7,355		)		(8,023		)		(8,692		)
Tangible assets		$	5,276,949			$	5,235,516			$	5,123,933			$	5,013,810			$	4,959,159
Tangible common equity to tangible assets		9.69		%		9.60		%		9.51		%		9.88		%		9.68		%

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

		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands, except share data)		2016				2016				2015				2015				2015
ASSETS
Cash and due from banks		$	76,482			$	85,495			$	71,797			$	69,628			$	66,715
Interest-bearing deposits in other banks		14,184				7,180				8,397				14,376				14,775
Investment securities:
Available for sale		1,260,593				1,299,176				1,272,255				1,272,382				1,274,312
Held to maturity (fair value of $238,066 at June 30, 2016, $243,072 at March 31, 2016, $244,136 at December 31, 2015, $254,540 at September 30, 2015, and $259,150 at June 30, 2015)		234,230				241,597				247,917				254,719				262,778
Total investment securities		1,494,823				1,540,773				1,520,172				1,527,101				1,537,090
Loans held for sale		9,921				11,270				14,109				9,786				22,917
Loans and leases		3,403,947				3,308,968				3,211,532				3,101,463				3,006,055
Less allowance for loan and lease losses		60,764				62,149				63,314				66,644				66,924
Net loans and leases		3,343,183				3,246,819				3,148,218				3,034,819				2,939,131
Premises and equipment, net		48,370				48,322				49,161				47,822				47,681
Accrued interest receivable		15,339				14,818				14,898				13,779				14,021
Investment in unconsolidated subsidiaries		7,204				5,627				6,157				6,489				6,720
Other real estate		1,032				1,260				1,962				1,913				5,278
Mortgage servicing rights		15,778				16,800				17,797				18,174				18,586
Other intangible assets		6,018				6,686				7,355				8,023				8,692
Bank-owned life insurance		154,678				154,592				153,967				153,449				153,015
Federal Home Loan Bank stock		15,218				10,420				8,606				12,048				12,129
Other assets		80,737				92,140				108,692				104,426				121,101
Total assets		$	5,282,967			$	5,242,202			$	5,131,288			$	5,021,833			$	4,967,851
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand		$	1,152,666			$	1,140,741			$	1,145,244			$	1,112,761			$	1,080,428
Interest-bearing demand		846,589				849,880				824,895				785,936				807,851
Savings and money market		1,371,163				1,465,524				1,399,093				1,283,517				1,261,180
Time		1,034,724				1,040,457				1,064,207				1,048,289				1,032,863
Total deposits		4,405,142				4,496,602				4,433,439				4,230,503				4,182,322
Short-term borrowings		226,000				106,000				69,000				155,000				157,000
Long-term debt		92,785				92,785				92,785				92,785				92,785
Other liabilities		41,424				37,438				41,425				40,284				46,897
Total liabilities		4,765,351				4,732,825				4,636,649				4,518,572				4,479,004
Equity:
Preferred stock, no par value, authorized 1,100,000 shares; issued and outstanding none at: June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, and June 30, 2015		—				—				—				—				—
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 31,036,895 at June 30, 2016; 31,164,287 at March 31, 2016; 31,361,452 shares at December 31, 2015, 31,330,644 shares at September 30, 2015, and 31,501,633 shares at June 30, 2015		538,434				544,029				548,878				548,518				552,527
Surplus		83,482				83,534				82,847				81,528				79,373
Accumulated deficit		(122,730		)		(130,511		)		(137,314		)		(133,821		)		(142,267		)
Accumulated other comprehensive income (loss)		18,421				12,306				203				7,036				(786		)
Total shareholders’ equity		517,607				509,358				494,614				503,261				488,847
Non-controlling interest		9				19				25				—				—
Total equity		517,616				509,377				494,639				503,261				488,847
Total liabilities and equity		$	5,282,967			$	5,242,202			$	5,131,288			$	5,021,833			$	4,967,851

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

		Three Months Ended																				Six Months Ended
		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,				Jun 30,
(Dollars in thousands, except per share data)		2016				2016				2015				2015				2015				2016				2015
Interest income:
Interest and fees on loans and leases		$	32,878			$	31,793			$	30,565			$	30,148			$	29,572			$	64,671			$	58,174
Interest and dividends on investment securities:
Taxable interest		7,953				8,396				8,282				8,260				8,277				16,349				16,427
Tax-exempt interest		995				996				1,006				1,008				1,010				1,991				2,008
Dividends		10				10				10				9				8				20				17
Interest on deposits in other banks		11				17				7				6				11				28				22
Dividends on Federal Home Loan Bank stock		23				37				46				11				18				60				29
Total interest income		41,870				41,249				39,916				39,442				38,896				83,119				76,677
Interest expense:
Interest on deposits:
Demand		123				111				101				104				99				234				194
Savings and money market		269				263				238				230				225				532				448
Time		957				898				647				568				549				1,855				1,097
Interest on short-term borrowings		177				50				59				73				79				227				122
Interest on long-term debt		735				716				677				662				650				1,451				1,287
Total interest expense		2,261				2,038				1,722				1,637				1,602				4,299				3,148
Net interest income		39,609				39,211				38,194				37,805				37,294				78,820				73,529
Provision (credit) for loan and lease losses		(1,382		)		(747		)		(1,958		)		(3,647		)		(7,319		)		(2,129		)		(10,066		)
Net interest income after provision for loan and lease losses		40,991				39,958				40,152				41,452				44,613				80,949				83,595
Other operating income:
Service charges on deposit accounts		1,908				1,964				1,999				1,947				1,915				3,872				3,883
Loan servicing fees		1,362				1,362				1,399				1,407				1,427				2,724				2,850
Other service charges and fees		3,028				2,767				2,772				2,803				2,781				5,795				5,886
Income from fiduciary activities		857				840				825				854				830				1,697				1,664
Equity in earnings of unconsolidated subsidiaries		184				90				88				165				229				274				325
Fees on foreign exchange		126				148				98				126				98				274				226
Investment securities gains (losses)		—				—				—				—				(1,866		)		—				(1,866		)
Income from bank-owned life insurance		1,232				625				465				434				461				1,857				1,135
Loan placement fees		133				46				146				202				225				179				372
Net gains on sales of residential loans		1,845				1,466				1,332				1,551				1,630				3,311				3,224
Net gains on sales of foreclosed assets		241				308				189				252				94				549				127
Other (refer to Table 5)		776				549				528				88				300				1,325				1,488
Total other operating income		11,692				10,165				9,841				9,829				8,124				21,857				19,314
Other operating expense:
Salaries and employee benefits		17,850				16,937				16,895				17,193				15,176				34,787				32,341
Net occupancy		3,557				3,314				3,981				3,547				3,403				6,871				6,904
Equipment		769				811				858				775				933				1,580				1,842
Amortization of other intangible assets		2,423				2,178				1,512				1,683				1,559				4,601				3,664
Communication expense		919				959				822				895				942				1,878				1,766
Legal and professional services		1,723				1,613				1,671				1,808				1,642				3,336				3,861
Computer software expense		2,222				2,704				2,067				2,286				2,382				4,926				4,478
Advertising expense		433				634				964				502				449				1,067				1,084
Foreclosed asset expense		49				15				154				3				257				64				329
Other (refer to Table 5)		4,270				3,710				3,652				3,483				5,715				7,980				10,207
Total other operating expense		34,215				32,875				32,576				32,175				32,458				67,090				66,476
Income before income taxes		18,468				17,248				17,417				19,106				20,279				35,716				36,433
Income tax expense		6,331				6,067				6,485				6,900				7,944				12,398				13,703
Net income		$	12,137			$	11,181			$	10,932			$	12,206			$	12,335			$	23,318			$	22,730
Per common share data:
Basic earnings per share		$	0.39			$	0.36			$	0.35			$	0.39			$	0.39			$	0.75			$	0.69
Diluted earnings per share		0.39				0.35				0.34				0.38				0.39				0.74				0.68
Cash dividends declared		0.14				0.14				0.46				0.12				0.12				0.28				0.24
Basic weighted average shares outstanding		31,060,593				31,263,433				31,317,627				31,330,964				31,525,075				31,162,013				33,166,987
Diluted weighted average shares outstanding		31,262,525				31,506,307				31,727,478				31,749,880				31,953,022				31,359,568				33,588,233

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

		Three Months Ended																				Six Months Ended
		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,				Jun 30,
(Dollars in thousands)		2016				2016				2015				2015				2015				2016				2015
Income recovered on nonaccrual loans previously charged-off		$	301			$	157			$	104			$	262			$	209			$	458			$	428
Other recoveries		249				21				17				244				15				270				289
Unrealized gains (losses) on loans-held-for-sale and interest rate locks		(29		)		(79		)		54				(646		)		(198		)		(108		)		268
Commissions on sale of checks		86				86				79				86				82				172				160
Other		169				364				274				142				192				533				343
Total other operating income - Other		$	776			$	549			$	528			$	88			$	300			$	1,325			$	1,488

		Three Months Ended																				Six Months Ended
		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,				Jun 30,
(Dollars in thousands)		2016				2016				2015				2015				2015				2016				2015
Charitable contributions		$	184			$	218			$	103			$	179			$	2,138			$	402			$	2,277
FDIC insurance assessment		563				639				622				685				701				1,202				1,399
Miscellaneous loan expenses		306				254				325				314				434				560				709
ATM and debit card expenses		448				428				407				365				180				876				766
Amortization of investments in low-income housing tax credit partnerships		258				257				258				258				274				515				562
Armored car expenses		201				201				254				213				195				402				429
Entertainment and promotions		223				231				405				191				266				454				463
Stationery and supplies		172				267				230				381				219				439				415
Directors’ fees and expenses		199				205				101				156				214				404				405
Provision (credit) for residential mortgage loan repurchase losses		(36		)		(351		)		(596		)		(883		)		(32		)		(387		)		127
Increase (decrease) to the reserve for unfunded commitments		20				44				(223		)		255				(272		)		64				(303		)
Other		1,732				1,317				1,766				1,369				1,398				3,049				2,958
Total other operating expense - Other		$	4,270			$	3,710			$	3,652			$	3,483			$	5,715			$	7,980			$	10,207

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
(Unaudited)		TABLE 6

		Three Months Ended											Three Months Ended											Three Months Ended
		June 30, 2016											March 31, 2016											June 30, 2015
		Average				Average							Average				Average							Average				Average
(Dollars in thousands)		Balance				Yield/Rate			Interest				Balance				Yield/Rate			Interest				Balance				Yield/Rate			Interest
ASSETS
Interest-earning assets:
Interest-bearing deposits in other banks		$	8,946			0.48	%		$	11			$	13,990			0.49	%		$	17			$	17,160			0.24	%		$	11
Investment securities, excluding valuation allowance:
Taxable		1,318,579				2.42			7,963				1,331,717				2.52			8,406				1,360,101				2.44			8,285
Tax-exempt		173,396				3.53			1,530				174,044				3.52			1,532				176,086				3.53			1,554
Total investment securities		1,491,975				2.55			9,493				1,505,761				2.64			9,938				1,536,187				2.56			9,839
Loans and leases, incl. loans held for sale		3,377,362				3.91			32,878				3,258,872				3.92			31,793				2,981,184				3.97			29,572
Federal Home Loan Bank stock		12,115				0.76			23				7,633				1.92			37				32,046				0.23			18
Total interest-earning assets		4,890,398				3.48			42,405				4,786,256				3.50			41,785				4,566,577				3.46			39,440
Noninterest-earning assets		357,690											362,488											381,225
Total assets		$	5,248,088										$	5,148,744										$	4,947,802
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits		$	843,611			0.06	%		$	123			$	827,502			0.05	%		$	111			$	812,339			0.05	%		$	99
Savings and money market deposits		1,435,754				0.08			269				1,427,733				0.07			263				1,257,940				0.07			225
Time deposits under $100,000		207,371				0.38			195				211,622				0.37			197				230,425				0.37			212
Time deposits $100,000 and over		837,619				0.37			762				888,683				0.32			701				846,966				0.16			337
Total interest-bearing deposits		3,324,355				0.16			1,349				3,355,540				0.15			1,272				3,147,670				0.11			873
Short-term borrowings		148,390				0.48			177				44,423				0.45			50				116,945				0.28			79
Long-term debt		92,785				3.19			735				92,785				3.10			716				92,785				2.81			650
Total interest-bearing liabilities		3,565,530				0.26			2,261				3,492,748				0.23			2,038				3,357,400				0.19			1,602
Noninterest-bearing deposits		1,134,664											1,112,530											1,051,088
Other liabilities		37,127											38,111											42,433
Total liabilities		4,737,321											4,643,389											4,450,921
Shareholders’ equity		510,753											505,330											496,881
Non-controlling interest		14											25											—
Total equity		510,767											505,355											496,881
Total liabilities and equity		$	5,248,088										$	5,148,744										$	4,947,802
Net interest income									$	40,144										$	39,747										$	37,838
Interest rate spread						3.22	%										3.27	%										3.27	%
Net interest margin						3.29	%										3.33	%										3.32	%

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

		Six Months Ended											Six Months Ended
		June 30, 2016											June 30, 2015
		Average				Average							Average				Average
(Dollars in thousands)		Balance				Yield/Rate			Interest				Balance				Yield/Rate			Interest
ASSETS
Interest-earning assets:
Interest-bearing deposits in other banks		$	11,468			0.48	%		$	28			$	17,601			0.25	%		$	22
Investment securities, excluding valuation allowance:
Taxable		1,325,148				2.47			16,369				1,335,642				2.46			16,444
Tax-exempt		173,720				3.53			3,063				176,841				3.49			3,089
Total investment securities		1,498,868				2.59			19,432				1,512,483				2.58			19,533
Loans and leases, including loans held for sale		3,318,117				3.91			64,671				2,968,425				3.94			58,174
Federal Home Loan Bank stock		9,874				1.21			60				37,895				0.15			29
Total interest earning assets		4,838,327				3.49			84,191				4,536,404				3.44			77,758
Noninterest-earning assets		360,089											382,519
Total assets		$	5,198,416										$	4,918,923
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits		$	835,556			0.06	%		$	234			$	800,096			0.05	%		$	194
Savings and money market deposits		1,431,743				0.07			532				1,253,428				0.07			448
Time deposits under $100,000		209,497				0.38			392				233,813				0.37			434
Time deposits $100,000 and over		863,151				0.34			1,463				841,629				0.16			663
Total interest-bearing deposits		3,339,947				0.16			2,621				3,128,966				0.11			1,739
Short-term borrowings		96,407				0.47			227				90,235				0.27			122
Long-term debt		92,785				3.14			1,451				92,785				2.80			1,287
Total interest-bearing liabilities		3,529,139				0.24			4,299				3,311,986				0.19			3,148
Noninterest-bearing deposits		1,123,597											1,032,268
Other liabilities		37,620											42,430
Total liabilities		4,690,356											4,386,684
Shareholders’ equity		508,041											532,239
Non-controlling interest		19											—
Total equity		508,060											532,239
Total liabilities and equity		$	5,198,416										$	4,918,923
Net interest income									$	79,892										$	74,610
Interest rate spread						3.25	%										3.25	%
Net interest margin						3.31	%										3.30	%

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Loans and Leases by Geographic Distribution
(Unaudited)		TABLE 8

		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands)		2016				2016				2015				2015				2015
HAWAII:
Commercial, financial and agricultural		$	360,102			$	358,432			$	339,738			$	335,919			$	341,468
Real estate:
Construction		95,355				98,203				81,655				72,071				80,168
Mortgage - residential		1,501,775				1,459,202				1,436,305				1,385,286				1,351,962
Mortgage - commercial		716,452				646,013				642,845				616,085				588,334
Consumer		277,874				267,855				273,248				263,568				254,655
Leases		843				936				1,028				1,123				2,589
Total loans and leases		2,952,401				2,830,641				2,774,819				2,674,052				2,619,176
Allowance for loan and lease losses		(52,375		)		(52,068		)		(54,141		)		(56,150		)		(57,402		)
Net loans and leases		$	2,900,026			$	2,778,573			$	2,720,678			$	2,617,902			$	2,561,774
U.S. MAINLAND:
Commercial, financial and agricultural		$	143,965			$	176,659			$	181,348			$	170,624			$	158,133
Real estate:
Construction		3,073				3,151				3,230				3,309				3,387
Mortgage - residential		—				—				—				—				—
Mortgage - commercial		126,132				127,023				117,904				120,900				106,859
Consumer		178,376				171,494				134,231				132,578				118,500
Leases		—				—				—				—				—
Total loans and leases		451,546				478,327				436,713				427,411				386,879
Allowance for loan and lease losses		(8,389		)		(10,081		)		(9,173		)		(10,494		)		(9,522		)
Net loans and leases		$	443,157			$	468,246			$	427,540			$	416,917			$	377,357
TOTAL:
Commercial, financial and agricultural		$	504,067			$	535,091			$	521,086			$	506,543			$	499,601
Real estate:
Construction		98,428				101,354				84,885				75,380				83,555
Mortgage - residential		1,501,775				1,459,202				1,436,305				1,385,286				1,351,962
Mortgage - commercial		842,584				773,036				760,749				736,985				695,193
Consumer		456,250				439,349				407,479				396,146				373,155
Leases		843				936				1,028				1,123				2,589
Total loans and leases		3,403,947				3,308,968				3,211,532				3,101,463				3,006,055
Allowance for loan and lease losses		(60,764		)		(62,149		)		(63,314		)		(66,644		)		(66,924		)
Net loans and leases		$	3,343,183			$	3,246,819			$	3,148,218			$	3,034,819			$	2,939,131

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Deposits
(Unaudited)		TABLE 9

		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands)		2016				2016				2015				2015				2015
Noninterest-bearing demand		$	1,152,666			$	1,140,741			$	1,145,244			$	1,112,761			$	1,080,428
Interest-bearing demand		846,589				849,880				824,895				785,936				807,851
Savings and money market		1,371,163				1,465,524				1,399,093				1,283,517				1,261,180
Time deposits less than $100,000		202,733				207,757				212,946				219,134				227,144
Core deposits		3,573,151				3,663,902				3,582,178				3,401,348				3,376,603
Government time deposits		645,134				644,877				664,756				640,708				612,979
Other time deposits $100,000 and over		186,857				187,823				186,505				188,447				192,740
Total time deposits $100,000 and over		831,991				832,700				851,261				829,155				805,719
Total deposits		$	4,405,142			$	4,496,602			$	4,433,439			$	4,230,503			$	4,182,322

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

		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands)		2016				2016				2015				2015				2015
Nonaccrual loans (including loans held for sale):
Commercial, financial and agricultural		$	2,132			$	2,244			$	1,044			$	3,056			$	3,175
Real estate:
Construction		—				—				—				—				133
Mortgage - residential		8,670				5,527				6,130				6,301				10,032
Mortgage - commercial		3,073				6,913				7,094				2,731				13,490
Total nonaccrual loans		13,875				14,684				14,268				12,088				26,830
Other real estate owned (“OREO”):
Real estate:
Mortgage - residential		1,032				1,260				1,962				1,913				2,433
Mortgage - commercial		—				—				—				—				2,845
Total OREO		1,032				1,260				1,962				1,913				5,278
Total nonperforming assets (“NPAs”)		14,907				15,944				16,230				14,001				32,108
Loans delinquent for 90 days or more:
Real estate:
Mortgage - residential		135				656				—				—				—
Consumer		134				125				273				130				45
Leases		—				—				—				—				—
Total loans delinquent for 90 days or more		269				781				273				130				45
Restructured loans still accruing interest:
Commercial, financial and agricultural		—				—				—				327				339
Real estate:
Construction		745				776				809				841				839
Mortgage - residential		15,729				16,197				16,224				17,592				16,428
Mortgage - commercial		3,020				3,128				3,224				2,253				1,360
Total restructured loans still accruing interest		19,494				20,101				20,257				21,013				18,966
Total NPAs, loans delinquent for 90 days or more and restructured loans still accruing interest		$	34,670			$	36,826			$	36,760			$	35,144			$	51,119
Total nonaccrual loans as a percentage of loans and leases		0.41		%		0.44		%		0.44		%		0.39		%		0.89		%
Total NPAs as a percentage of loans and leases and OREO		0.44		%		0.48		%		0.51		%		0.45		%		1.07		%
Total NPAs and loans delinquent for 90 days or more as a percentage of loans and leases and OREO		0.45		%		0.51		%		0.51		%		0.46		%		1.07		%
Total NPAs, loans delinquent for 90 days or more, and restructured loans still accruing interest as a percentage of loans and leases and OREO		1.02		%		1.11		%		1.14		%		1.13		%		1.70		%
Quarter-to-quarter changes in NPAs:
Balance at beginning of quarter		$	15,944			$	16,230			$	14,001			$	32,108			$	40,770
Additions		4,334				1,303				2,992				681				6,761
Reductions:
Payments		(927		)		(754		)		(439		)		(4,002		)		(3,411		)
Return to accrual status		(3,717		)		(133		)		(216		)		(10,799		)		(274		)
Sales of NPAs		(865		)		(702		)		(71		)		(4,007		)		(8,280		)
Charge-offs/valuation adjustments		138				—				(37		)		20				(3,458		)
Total reductions		(5,371		)		(1,589		)		(763		)		(18,788		)		(15,423		)
Balance at end of quarter		$	14,907			$	15,944			$	16,230			$	14,001			$	32,108

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

		Three Months Ended																				Six Months Ended
		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,				Jun 30,
(Dollars in thousands)		2,016				2,016				2,015				2,015				2,015				2,016				2,015
Allowance for loan and lease losses:
Balance at beginning of period		$	62,149			$	63,314			$	66,644			$	66,924			$	71,433			$	63,314			$	74,040
Provision (credit) for loan and lease losses		(1,382		)		(747		)		(1,958		)		(3,647		)		(7,319		)		(2,129		)		(10,066		)
Charge-offs:
Commercial, financial and agricultural		272				352				554				170				4,003				624				4,934
Real estate:
Mortgage - residential		—				—				—				46				50				—				64
Mortgage - commercial		—				—				838				—				—				—				—
Consumer		1,135				1,112				721				874				1,214				2,247				3,055
Leases		—				—				—				—				—				—				—
Total charge-offs		1,407				1,464				2,113				1,090				5,267				2,871				8,053
Recoveries:
Commercial, financial and agricultural		720				349				411				504				3,279				1,069				3,873
Real estate:
Construction		9				9				10				283				464				18				587
Mortgage - residential		177				37				96				196				397				214				1,885
Mortgage - commercial		14				13				14				3,130				3,562				27				3,575
Consumer		484				638				210				317				375				1,122				1,083
Leases		—				—				—				27				—				—				—
Total recoveries		1,404				1,046				741				4,457				8,077				2,450				11,003
Net charge-offs (recoveries)		3				418				1,372				(3,367		)		(2,810		)		421				(2,950		)
Balance at end of period		$	60,764			$	62,149			$	63,314			$	66,644			$	66,924			$	60,764			$	66,924
Average loans and leases, net of unearned		$	3,377,362			$	3,258,872			$	3,142,895			$	3,070,384			$	2,981,184			$	3,318,117			$	2,968,425
Annualized ratio of net charge-offs (recoveries) to average loans and leases		—		%		0.05		%		0.17		%		(0.44		)%		(0.38		)%		0.03		%		(0.20		)%
Ratio of allowance for loan and lease losses to loans and leases		1.79		%		1.88		%		1.97		%		2.15		%		2.23		%		1.79		%		2.23		%