EX-99.1 2 exhibit99-1erq32022.htm EX-99.1
Exhibit 99.1

|  |  | FOR IMMEDIATE RELEASE
Investor Contact: | Ian Tanaka | Media Contact: | Tim Sakahara
| SVP, Treasurer |  | AVP, Corporate Communications Manager
| (808) 544-3646 |  | (408) 500-5269
| ian.tanaka@cpb.bank |  | tim.sakahara@cpb.bank

NEWS RELEASE

CENTRAL PACIFIC FINANCIAL REPORTS THIRD QUARTER EARNINGS OF $16.7 MILLION
•Net income of $16.7 million, or $0.61 per diluted share for the quarter.
•ROA of 0.91% and ROE of 14.49% for the quarter.
•Total loans of $5.42 billion increased by $120.6 million, or 2.3% (9.2% annualized) in the third quarter.
•Net interest income increased by $2.4 million, or 4.5% from the previous quarter.
•Net interest margin of 3.17% increased by 12 bps from the previous quarter.
•Board of Directors approved quarterly cash dividend of $0.26 per share.
•Arnold Martines, current President and Chief Operating Officer announced to succeed Paul Yonamine as Chief Executive Officer, effective January 1, 2023.
HONOLULU, HI, October 21, 2022 – Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income for the third quarter of 2022 of $16.7 million, or fully diluted earnings per share ("EPS") of $0.61.
"We continued to execute well in the third quarter as reflected in our strong earnings, loan growth and expanding net interest margin," said Paul Yonamine, Chairman and Chief Executive Officer. "While the broader economy is presenting challenges for the entire financial services industry, Hawaii has outperformed the nation during past recessions. Additionally, Central Pacific is well-positioned with solid asset quality and capital.”
"We are pleased with our third quarter performance as our teams continue to work hard to meet our customers' needs. We continue to develop our digital and Banking-as-a-Service initiatives as a key part of our long-term strategic goal to build robust digital channels," said Arnold Martines, President and Chief Operating Officer.
Yesterday, the Company announced the promotion of Martines to Chief Executive Officer of both the Company and the Bank, succeeding Yonamine who will become Chairman Emeritus of the Company and the Bank, as well as an advisor to Martines. Also, Catherine Ngo, presently Executive Vice Chair, will become Chair of the Board of Directors of both the Company and the Bank. All changes will be effective January 1, 2023. In commenting on the changes, Yonamine said, "I have had four great years at Central

Central Pacific Financial Reports Third Quarter Earnings of $16.7 Million
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Pacific Bank and have accomplished all of my strategic goals for the Company and the Bank, including our RISE 2020 program with the $40 million renovation of our Central Pacific Plaza headquarters, our online, mobile and ATM upgrades and our total corporate rebrand. These accomplishments have put us on a solid path to becoming a digital-first bank to help us excel in the rapidly changing banking paradigm. I’d like to express my appreciation to the Board, Arnold, David and Catherine, for their partnership and support the past four years. I expect us to continue on our current path and can think of no better banker anywhere than Arnold Martines to lead this great institution into the future."
In commenting on the changes, Martines, who will also be named to the Board of Directors of the Company and the Bank, said, "It is my honor and privilege to lead Central Pacific Bank. We are an organization with strong core values and a solid digital roadmap for the future, thanks to Paul and Catherine. We intend to stay true to our founders and continue their legacy of focusing on serving the needs of our customers, by providing exceptional service while leveraging new technologies to provide the ultimate in convenience and value."
Earnings Highlights
Net interest income for the third quarter of 2022 was $55.4 million, an increase of $2.4 million, or 4.5% from the prior quarter, and a decrease of $0.7 million, or 1.3% from the year-ago quarter.
Net interest margin for the third quarter of 2022 was 3.17%, an increase of 12 basis points ("bps") from the prior quarter and a decrease of 14 bps from the year-ago quarter. The year-ago quarter included $8.6 million in net PPP interest income and fees, compared to $0.7 million in the current quarter.
The sequential quarter increase in net interest income and net interest margin is primarily due to higher asset yields and continued strong loan growth. Additional information on average balances, interest income and expenses and yields and rates is presented in Tables 4 and 5.
In the third quarter of 2022, the Company recorded a provision for credit losses of $0.4 million, compared to a provision of $1.0 million in the previous quarter and a release of the credit loss reserves of $2.6 million in the year-ago quarter.
Other operating income for the third quarter of 2022 totaled $9.6 million, compared to $17.1 million in the previous quarter and $10.3 million in the year-ago quarter. The decrease from the previous quarter was primarily due to the $8.5 million gain on sale of restricted Class B common stock of Visa, Inc. last quarter. Additional information on other operating income is presented in Table 3.
Other operating expense for the third quarter of 2022 totaled $42.0 million, compared to $45.3 million in the previous quarter and $41.3 million in the year-ago quarter. The decrease in other operating expense from the previous quarter was primarily due to a non-cash settlement charge of $4.9 million for the termination of the Company's defined benefit pension plan (included in other) last quarter. Additional information on other operating expense is presented in Table 3.
The efficiency ratio for the third quarter of 2022 was 64.62%, compared to 64.68% in the previous quarter and 62.32% in the year-ago quarter.
The effective tax rate for the third quarter of 2022 was 26.2%, compared to 26.0% in the previous quarter and 24.7% in the year-ago quarter.
Balance Sheet Highlights
Total assets at September 30, 2022 of $7.34 billion increased by $38.5 million, or 0.5% from $7.30 billion at June 30, 2022, and increased by $39.4 million, or 0.5% from $7.30 billion at September 30, 2021.
Total loans, net of deferred fees and costs, at September 30, 2022 of $5.42 billion increased by $120.6 million, or 2.3% from $5.30 billion at June 30, 2022, and increased by $376.4 million, or 7.5%, from $5.05 billion at September 30, 2021. Loans by type and geographic distribution are summarized in Table 6.
Total deposits at September 30, 2022 of $6.56 billion decreased by $65.6 million or 1.0% from $6.62 billion at June 30, 2022, but increased by $40.6 million, or 0.6%, from $6.52 billion at September 30, 2021. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $6.04 billion at September 30, 2022, and decreased by $119.3 million from June 30, 2022. Core deposit and total deposit balances are summarized in Table 7.

Central Pacific Financial Reports Third Quarter Earnings of $16.7 Million
Page 3
Asset Quality
Nonperforming assets at September 30, 2022 totaled $4.2 million, or 0.06% of total assets, compared to $5.0 million, or 0.07% of total assets at June 30, 2022, and $7.2 million, or 0.10% of total assets at September 30, 2021. Additional information on nonperforming assets, past due and restructured loans is presented in Table 8.
Net charge-offs in the third quarter of 2022 totaled $1.6 million, compared to net charge-offs of $1.0 million in the previous quarter, and net charge-offs of $0.2 million in the year-ago quarter.
The allowance for credit losses, as a percentage of total loans at September 30, 2022 was 1.19%, compared to 1.23% at June 30, 2022, and 1.48% at September 30, 2021. Additional information on net charge-offs and recoveries and the allowance for credit losses is presented in Table 9.
Capital
Total shareholders' equity was $438.5 million at September 30, 2022, compared to $455.1 million and $555.4 million at June 30, 2022 and September 30, 2021, respectively. The decline in shareholders' equity was primarily due to an increase in unrealized losses on our available-for-sale investment securities portfolio which flow through accumulated other comprehensive income, and were driven by the rising interest rate environment.
During the third quarter of 2022, the Company repurchased 218,000 shares of common stock, at a total cost of $4.9 million, or an average cost per share of $22.33. As of September 30, 2022, $15.2 million remained available for repurchase under the Company's share repurchase program.
At September 30, 2022, the Company's leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 8.7%, 11.5%, 13.7%, and 10.6%, respectively, compared to 8.6%, 11.6%, 13.9%, and 10.7%, respectively, at June 30, 2022.
On October 20, 2022, the Company's Board of Directors declared a quarterly cash dividend of $0.26 per share on its outstanding common shares. The dividend will be payable on December 15, 2022 to shareholders of record at the close of business on November 30, 2022.
Conference Call
The Company's management will host a conference call today at 1:00 p.m. Eastern Time (7:00 a.m. Hawaii Time) to discuss the quarterly results. Individuals are encouraged to listen to the live webcast of the presentation by visiting the investor relations page of the Company's website at http://ir.cpb.bank. Alternatively, investors may participate in the live call by dialing 1-844-200-6205 (access code: 420241). A playback of the call will be available through November 21, 2022 by dialing 1-866-813-9403 (access code: 996439) and on the Company's website. Information which may be discussed in the conference call is provided in an earnings supplement presentation on the Company's website at http://ir.cpb.bank.
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $7.34 billion in assets as of September 30, 2022. Central Pacific Bank, its primary subsidiary, operates 27 branches and 65 ATMs in the state of Hawaii. For additional information, please visit the Company's website at http://www.cpb.bank.
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Central Pacific Financial Reports Third Quarter Earnings of $16.7 Million
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Forward-Looking Statements ("FLS")
This document may contain FLS concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, the payment or nonpayment of dividends, capital position, credit losses, net interest margin or other financial items; statements of plans, objectives and expectations of Central Pacific Financial Corp. or its management or Board of Directors, including those relating to business plans, use of capital resources, products or services and regulatory developments and regulatory actions; statements of future economic performance including anticipated performance results from our business initiatives; or any statements of the assumptions underlying or relating to any of the foregoing. Words such as "believes," "plans," "anticipates," "expects," "intends," "forecasts," "hopes," "targeting," "continue," "remain," "will," "should," "estimates," "may" and other similar expressions are intended to identify FLS but are not the exclusive means of identifying such statements.
While we believe that our FLS and the assumptions underlying them are reasonably based, such statements and assumptions are by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect. Accordingly, actual results could differ materially from those statements or projections for a variety of reasons, including, but not limited to: the effects of inflation and rising interest rates; the adverse effects of the COVID-19 pandemic virus (and ongoing pandemic variants) on local, national and international economies, including, but not limited to, the adverse impact on tourism and construction in the State of Hawaii, our borrowers, customers, third-party contractors, vendors and employees as well as the effects of government programs and initiatives in response to COVID-19; the impact of our participation in the Paycheck Protection Program ("PPP") and fulfillment of government guarantees on our PPP loans; the increase in inventory or adverse conditions in the real estate market and deterioration in the construction industry; adverse changes in the financial performance and/or condition of our borrowers and, as a result, increased loan delinquency rates, deterioration in asset quality, and losses in our loan portfolio; our ability to achieve the objectives of our RISE2020 initiative; our ability to successfully implement and achieve the objectives of our Banking-as-a-Service ("BaaS") initiatives, including adoption of the initiatives by customers and risks faced by any of our bank collaborations including reputational and regulatory risk; the impact of local, national, and international economies and events (including natural disasters such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, earthquakes and pandemic viruses and diseases, including COVID-19) on the Company's business and operations and on tourism, the military, and other major industries operating within the Hawaii market and any other markets in which the Company does business; deterioration or malaise in domestic economic conditions, including any destabilization in the financial industry and deterioration of the real estate market, as well as the impact of declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), changes in capital standards, other regulatory reform and federal and state legislation, including but not limited to regulations promulgated by the Consumer Financial Protection Bureau (the "CFPB"), government-sponsored enterprise reform, and any related rules and regulations which affect our business operations and competitiveness; the costs and effects of legal and regulatory developments, including legal proceedings or regulatory or other governmental inquiries and proceedings and the resolution thereof, the results of regulatory examinations or reviews and the effect of, and our ability to comply with, any regulations or regulatory orders or actions we are or may become subject to; ability to successfully implement our initiatives to lower our efficiency ratio; 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 (the "FRB" or the "Federal Reserve"); securities market and monetary fluctuations, including the anticipated replacement of the London Interbank Offered Rate ("LIBOR") Index and the impact on our loans and debt which are tied to that index and uncertainties regarding potential alternative reference rates, including the Secured Overnight Financing Rate ("SOFR"); negative trends in our market capitalization and adverse changes in the price of the Company's common stock; political instability; acts of war or terrorism; pandemic virus and disease, including COVID-19; changes in consumer spending, borrowings and savings habits; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; cybersecurity and data privacy breaches and the consequence therefrom; the ability to address deficiencies in our internal controls over financial reporting or disclosure controls and procedures; 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 ("PCAOB"), the Financial Accounting Standards Board ("FASB") and other accounting standard setters and the cost and resources required to implement such changes; our ability to attract and retain key personnel; changes in our personnel, organization, compensation and benefit plans; and our success at managing the risks involved in the foregoing items.
For further information with respect to factors that could cause actual results to materially differ from the expectations or projections stated in the FLS, please see the Company's publicly available Securities and Exchange Commission filings, including the Company's Form 10-K for the last fiscal year and, in particular, the discussion of "Risk Factors" set forth therein. We urge investors to consider all of these factors carefully in evaluating the FLS contained in this document. FLS speak only as of the date on which such statements are made. We undertake no obligation to update any FLS to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events except as required by law.

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

|  | Three Months Ended |  | Nine Months Ended
(Dollars in thousands, |  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31, |  | Sep 30, |  | Sep 30,
except for per share amounts) |  | 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2022 |  | 2021
CONDENSED INCOME STATEMENT |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 55,365 |  |  | $ | 52,978 |  |  | $ | 50,935 |  |  | $ | 53,096 |  |  | $ | 56,086 |  |  | $ | 159,278 |  |  | $ | 157,951 |
Provision (credit) for credit losses |  | 362 |  |  | 989 |  |  | (3,195) |  |  | (7,692) |  |  | (2,635) |  |  | (1,844) |  |  | (6,899) |
Total other operating income |  | 9,629 |  |  | 17,138 |  |  | 9,551 |  |  | 11,566 |  |  | 10,253 |  |  | 36,318 |  |  | 31,494 |
Total other operating expense |  | 41,998 |  |  | 45,349 |  |  | 38,205 |  |  | 42,422 |  |  | 41,345 |  |  | 125,552 |  |  | 120,624 |
Income tax expense |  | 5,919 |  |  | 6,184 |  |  | 6,038 |  |  | 7,605 |  |  | 6,814 |  |  | 18,141 |  |  | 18,153 |
Net income |  | 16,715 |  |  | 17,594 |  |  | 19,438 |  |  | 22,327 |  |  | 20,815 |  |  | 53,747 |  |  | 57,567 |
Basic earnings per common share |  | $ | 0.61 |  |  | $ | 0.64 |  |  | $ | 0.70 |  |  | $ | 0.80 |  |  | $ | 0.74 |  |  | $ | 1.96 |  |  | $ | 2.05 |
Diluted earnings per common share |  | 0.61 |  |  | 0.64 |  |  | 0.70 |  |  | 0.80 |  |  | 0.74 |  |  | 1.94 |  |  | 2.03 |
Dividends declared per common share |  | 0.26 |  |  | 0.26 |  |  | 0.26 |  |  | 0.25 |  |  | 0.24 |  |  | 0.78 |  |  | 0.71 |
PERFORMANCE RATIOS |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets (ROA) [1] |  | 0.91 | % |  | 0.96 | % |  | 1.06 | % |  | 1.22 | % |  | 1.15 | % |  | 0.98 | % |  | 1.10 | %
Return on average shareholders’ equity (ROE) [1] |  | 14.49 |  |  | 14.93 |  |  | 14.44 |  |  | 16.05 |  |  | 14.82 |  |  | 14.62 |  |  | 13.82 |
Average shareholders’ equity to average assets |  | 6.30 |  |  | 6.45 |  |  | 7.34 |  |  | 7.61 |  |  | 7.79 |  |  | 6.69 |  |  | 7.93 |
Efficiency ratio [2] |  | 64.62 |  |  | 64.68 |  |  | 63.16 |  |  | 65.61 |  |  | 62.32 |  |  | 64.19 |  |  | 63.67 |
Net interest margin (NIM) [1] |  | 3.17 |  |  | 3.05 |  |  | 2.97 |  |  | 3.08 |  |  | 3.31 |  |  | 3.06 |  |  | 3.22 |
Dividend payout ratio [3] |  | 42.62 |  |  | 40.63 |  |  | 37.14 |  |  | 31.25 |  |  | 32.43 |  |  | 40.21 |  |  | 34.98 |
SELECTED AVERAGE BALANCES |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average loans, including loans held for sale |  | $ | 5,355,088 |  |  | $ | 5,221,300 |  |  | $ | 5,114,260 |  |  | $ | 5,073,069 |  |  | $ | 5,022,909 |  |  | $ | 5,231,098 |  |  | $ | 5,070,993 |
Average interest-earning assets |  | 6,991,773 |  |  | 6,982,556 |  |  | 6,932,649 |  |  | 6,890,829 |  |  | 6,761,643 |  |  | 6,969,326 |  |  | 6,559,740 |
Average assets |  | 7,320,751 |  |  | 7,309,939 |  |  | 7,341,850 |  |  | 7,315,325 |  |  | 7,210,210 |  |  | 7,323,596 |  |  | 6,998,034 |
Average deposits |  | 6,535,321 |  |  | 6,626,462 |  |  | 6,581,593 |  |  | 6,536,826 |  |  | 6,424,768 |  |  | 6,580,502 |  |  | 6,219,372 |
Average interest-bearing liabilities |  | 4,538,893 |  |  | 4,442,172 |  |  | 4,429,114 |  |  | 4,407,612 |  |  | 4,326,589 |  |  | 4,470,461 |  |  | 4,247,745 |
Average shareholders’ equity |  | 461,328 |  |  | 471,420 |  |  | 538,601 |  |  | 556,462 |  |  | 561,606 |  |  | 490,140 |  |  | 555,264 |
[1] ROA and ROE are annualized based on a 30/360 day convention. Annualized net interest income and expense in the NIM calculation are based on the day count interest payment conventions at the interest-earning asset or interest-bearing liability level (i.e. 30/360, actual/actual).
[2] Efficiency ratio is defined as total operating expense divided by total revenue (net interest income and total other operating income).
[3] Dividend payout ratio is defined as dividends declared per share divided by diluted earnings per share. |  |  |  |

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

|  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31, |  | Sep 30,
|  | 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021
REGULATORY CAPITAL RATIOS |  |  |  |  |  |  |  |  |  |
Central Pacific Financial Corp. |  |  |  |  |  |  |  |  |  |
Leverage capital ratio |  | 8.7 | % |  | 8.6 | % |  | 8.5 | % |  | 8.5 | % |  | 8.5 | %
Tier 1 risk-based capital ratio |  | 11.5 |  |  | 11.6 |  |  | 11.9 |  |  | 12.2 |  |  | 12.2 |
Total risk-based capital ratio |  | 13.7 |  |  | 13.9 |  |  | 14.2 |  |  | 14.5 |  |  | 14.6 |
Common equity tier 1 capital ratio |  | 10.6 |  |  | 10.7 |  |  | 10.9 |  |  | 11.2 |  |  | 11.2 |
Central Pacific Bank |  |  |  |  |  |  |  |  |  |
Leverage capital ratio |  | 9.1 |  |  | 9.0 |  |  | 9.0 |  |  | 8.9 |  |  | 9.0 |
Tier 1 risk-based capital ratio |  | 12.2 |  |  | 12.2 |  |  | 12.6 |  |  | 12.8 |  |  | 13.0 |
Total risk-based capital ratio |  | 13.4 |  |  | 13.5 |  |  | 13.8 |  |  | 14.0 |  |  | 14.3 |
Common equity tier 1 capital ratio |  | 12.2 |  |  | 12.2 |  |  | 12.6 |  |  | 12.8 |  |  | 13.0 |

|  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31, |  | Sep 30,
(dollars in thousands, except for per share amounts) |  | 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021
BALANCE SHEET |  |  |  |  |  |  |  |  |  |
Total loans, net of deferred fees and costs |  | $ | 5,422,212 |  |  | $ | 5,301,633 |  |  | $ | 5,174,837 |  |  | $ | 5,101,649 |  |  | $ | 5,045,797 |
Total assets |  | 7,337,631 |  |  | 7,299,178 |  |  | 7,298,819 |  |  | 7,419,089 |  |  | 7,298,231 |
Total deposits |  | 6,556,434 |  |  | 6,622,061 |  |  | 6,599,031 |  |  | 6,639,158 |  |  | 6,515,863 |
Long-term debt |  | 105,799 |  |  | 105,738 |  |  | 105,677 |  |  | 105,616 |  |  | 105,556 |
Total shareholders’ equity |  | 438,468 |  |  | 455,100 |  |  | 486,328 |  |  | 558,219 |  |  | 555,419 |
Total shareholders’ equity to total assets |  | 5.98 | % |  | 6.23 | % |  | 6.66 | % |  | 7.52 | % |  | 7.61 | %
ASSET QUALITY |  |  |  |  |  |  |  |  |  |
Allowance for credit losses (ACL) |  | $ | 64,382 |  |  | $ | 65,211 |  |  | $ | 64,754 |  |  | $ | 68,097 |  |  | $ | 74,587 |
Nonaccrual loans |  | 4,220 |  |  | 4,983 |  |  | 5,336 |  |  | 5,881 |  |  | 7,237 |
Non-performing assets (NPA) |  | 4,220 |  |  | 4,983 |  |  | 5,336 |  |  | 5,881 |  |  | 7,237 |
ACL to total loans |  | 1.19 | % |  | 1.23 | % |  | 1.25 | % |  | 1.33 | % |  | 1.48 | %
ACL to nonaccrual loans |  | 1,525.64 | % |  | 1,308.67 | % |  | 1,213.53 | % |  | 1,157.92 | % |  | 1,030.63 | %
NPA to total assets |  | 0.06 | % |  | 0.07 | % |  | 0.07 | % |  | 0.08 | % |  | 0.10 | %
PER SHARE OF COMMON STOCK OUTSTANDING |  |  |  |  |  |  |  |  |  |
Book value per common share |  | $ | 16.08 |  |  | $ | 16.57 |  |  | $ | 17.63 |  |  | $ | 20.14 |  |  | $ | 19.84 |
Closing market price per common share |  | 20.69 |  |  | 21.45 |  |  | 27.90 |  |  | 28.17 |  |  | 25.68 |

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
Consolidated Balance Sheets |
(Unaudited) | TABLE 2

|  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31, |  | Sep 30,
(Dollars in thousands, except share data) |  | 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021
ASSETS |  |  |  |  |  |  |  |  |  |
Cash and due from financial institutions |  | $ | 116,365 |  |  | $ | 108,389 |  |  | $ | 83,947 |  |  | $ | 81,506 |  |  | $ | 108,669 |
Interest-bearing deposits in other financial institutions |  | 22,332 |  |  | 22,741 |  |  | 118,183 |  |  | 247,401 |  |  | 240,173 |
Investment securities: |  |  |  |  |  |  |  |  |  |
Available-for-sale debt securities, at fair value |  | 686,681 |  |  | 787,373 |  |  | 1,199,482 |  |  | 1,631,699 |  |  | 1,535,450 |
Held-to-maturity debt securities, at amortized cost; fair value of: $590,880 at September 30, 2022, $635,565 at June 30, 2022, $329,503 at March 31, 2022, and none at December 31, 2021 and September 30, 2021 |  | 662,827 |  |  | 663,365 |  |  | 329,507 |  |  | — |  |  | — |
Equity securities, at fair value |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,593 |
Total investment securities |  | 1,349,508 |  |  | 1,450,738 |  |  | 1,528,989 |  |  | 1,631,699 |  |  | 1,537,043 |
Loans held for sale |  | 1,701 |  |  | 535 |  |  | 4,677 |  |  | 3,531 |  |  | 5,290 |
Loans, net of deferred fees and costs |  | 5,422,212 |  |  | 5,301,633 |  |  | 5,174,837 |  |  | 5,101,649 |  |  | 5,045,797 |
Less: allowance for credit losses |  | 64,382 |  |  | 65,211 |  |  | 64,754 |  |  | 68,097 |  |  | 74,587 |
Loans, net of allowance for credit losses |  | 5,357,830 |  |  | 5,236,422 |  |  | 5,110,083 |  |  | 5,033,552 |  |  | 4,971,210 |
Premises and equipment, net |  | 89,979 |  |  | 88,664 |  |  | 79,455 |  |  | 80,354 |  |  | 80,190 |
Accrued interest receivable |  | 18,134 |  |  | 17,146 |  |  | 16,423 |  |  | 16,709 |  |  | 17,110 |
Investment in unconsolidated entities |  | 36,769 |  |  | 37,341 |  |  | 31,092 |  |  | 29,679 |  |  | 30,397 |
Mortgage servicing rights |  | 9,216 |  |  | 9,369 |  |  | 9,480 |  |  | 9,738 |  |  | 9,976 |
Bank-owned life insurance |  | 167,761 |  |  | 167,202 |  |  | 167,407 |  |  | 169,148 |  |  | 167,961 |
Federal Home Loan Bank ("FHLB") stock |  | 13,546 |  |  | 8,943 |  |  | 8,943 |  |  | 7,964 |  |  | 7,952 |
Right of use lease asset |  | 35,978 |  |  | 36,978 |  |  | 38,435 |  |  | 39,441 |  |  | 40,757 |
Other assets |  | 118,512 |  |  | 114,710 |  |  | 101,705 |  |  | 68,367 |  |  | 81,503 |
Total assets |  | $ | 7,337,631 |  |  | $ | 7,299,178 |  |  | $ | 7,298,819 |  |  | $ | 7,419,089 |  |  | $ | 7,298,231 |
LIABILITIES |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |
Noninterest-bearing demand |  | $ | 2,138,083 |  |  | $ | 2,282,967 |  |  | $ | 2,269,562 |  |  | $ | 2,291,246 |  |  | $ | 2,195,404 |
Interest-bearing demand |  | 1,441,302 |  |  | 1,444,566 |  |  | 1,433,284 |  |  | 1,415,277 |  |  | 1,372,626 |
Savings and money market |  | 2,194,991 |  |  | 2,214,146 |  |  | 2,197,647 |  |  | 2,225,903 |  |  | 2,296,968 |
Time |  | 782,058 |  |  | 680,382 |  |  | 698,538 |  |  | 706,732 |  |  | 650,865 |
Total deposits |  | 6,556,434 |  |  | 6,622,061 |  |  | 6,599,031 |  |  | 6,639,158 |  |  | 6,515,863 |
FHLB advances and other short-term borrowings |  | 115,000 |  |  | — |  |  | — |  |  | — |  |  | — |
Long-term debt |  | 105,799 |  |  | 105,738 |  |  | 105,677 |  |  | 105,616 |  |  | 105,556 |
Lease liability |  | 36,941 |  |  | 38,037 |  |  | 39,610 |  |  | 40,731 |  |  | 41,933 |
Other liabilities |  | 84,989 |  |  | 78,242 |  |  | 68,123 |  |  | 75,317 |  |  | 79,412 |
Total liabilities |  | 6,899,163 |  |  | 6,844,078 |  |  | 6,812,441 |  |  | 6,860,822 |  |  | 6,742,764 |
EQUITY |  |  |  |  |  |  |  |  |  |
Shareholders' equity: |  |  |  |  |  |  |  |  |  |
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021, and September 30, 2021 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,262,879 at September 30, 2022, 27,463,562 at June 30, 2022, 27,584,929 at March 31, 2022, 27,714,071 at December 31, 2021, and 27,999,588 at September 30, 2021 |  | 412,994 |  |  | 417,862 |  |  | 421,153 |  |  | 426,091 |  |  | 436,957 |
Additional paid-in capital |  | 100,426 |  |  | 98,977 |  |  | 98,270 |  |  | 98,073 |  |  | 97,279 |
Retained earnings |  | 74,301 |  |  | 64,693 |  |  | 54,252 |  |  | 42,015 |  |  | 22,916 |
Accumulated other comprehensive loss |  | (149,253) |  |  | (126,432) |  |  | (87,347) |  |  | (7,960) |  |  | (1,733) |
Total shareholders' equity |  | 438,468 |  |  | 455,100 |  |  | 486,328 |  |  | 558,219 |  |  | 555,419 |
Non-controlling interest |  | — |  |  | — |  |  | 50 |  |  | 48 |  |  | 48 |
Total equity |  | 438,468 |  |  | 455,100 |  |  | 486,378 |  |  | 558,267 |  |  | 555,467 |
Total liabilities and equity |  | $ | 7,337,631 |  |  | $ | 7,299,178 |  |  | $ | 7,298,819 |  |  | $ | 7,419,089 |  |  | $ | 7,298,231 |

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
Consolidated Statements of Income |
(Unaudited) | TABLE 3

|  | Three Months Ended |  | Nine Months Ended
|  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31, |  | Sep 30, |  | September 30,
(Dollars in thousands, except per share data) |  | 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2022 |  | 2021
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest and fees on loans |  | $ | 51,686 |  |  | $ | 46,963 |  |  | $ | 44,949 |  |  | $ | 47,576 |  |  | $ | 51,104 |  |  | $ | 143,598 |  |  | $ | 146,202 |
Interest and dividends on investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Taxable investment securities |  | 6,933 |  |  | 7,035 |  |  | 6,969 |  |  | 6,667 |  |  | 6,210 |  |  | 20,937 |  |  | 15,763 |
Tax-exempt investment securities |  | 805 |  |  | 807 |  |  | 816 |  |  | 642 |  |  | 470 |  |  | 2,428 |  |  | 1,330 |
Dividend income on investment securities |  | — |  |  | — |  |  | 21 |  |  | 21 |  |  | 18 |  |  | 21 |  |  | 54 |
Interest on deposits in other financial institutions |  | 107 |  |  | 191 |  |  | 72 |  |  | 86 |  |  | 105 |  |  | 370 |  |  | 176 |
Dividend income on FHLB stock |  | 138 |  |  | 68 |  |  | 59 |  |  | 61 |  |  | 62 |  |  | 265 |  |  | 184 |
Total interest income |  | 59,669 |  |  | 55,064 |  |  | 52,886 |  |  | 55,053 |  |  | 57,969 |  |  | 167,619 |  |  | 163,709 |
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest on deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand |  | 217 |  |  | 144 |  |  | 112 |  |  | 104 |  |  | 101 |  |  | 473 |  |  | 280 |
Savings and money market |  | 1,054 |  |  | 317 |  |  | 329 |  |  | 352 |  |  | 332 |  |  | 1,700 |  |  | 888 |
Time |  | 1,092 |  |  | 490 |  |  | 469 |  |  | 478 |  |  | 428 |  |  | 2,051 |  |  | 1,514 |
Interest on short-term borrowings |  | 660 |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | 662 |  |  | 2 |
Interest on long-term debt |  | 1,281 |  |  | 1,133 |  |  | 1,041 |  |  | 1,023 |  |  | 1,022 |  |  | 3,455 |  |  | 3,074 |
Total interest expense |  | 4,304 |  |  | 2,086 |  |  | 1,951 |  |  | 1,957 |  |  | 1,883 |  |  | 8,341 |  |  | 5,758 |
Net interest income |  | 55,365 |  |  | 52,978 |  |  | 50,935 |  |  | 53,096 |  |  | 56,086 |  |  | 159,278 |  |  | 157,951 |
Provision (credit) for credit losses |  | 362 |  |  | 989 |  |  | (3,195) |  |  | (7,692) |  |  | (2,635) |  |  | (1,844) |  |  | (6,899) |
Net interest income after provision (credit) for credit losses |  | 55,003 |  |  | 51,989 |  |  | 54,130 |  |  | 60,788 |  |  | 58,721 |  |  | 161,122 |  |  | 164,850 |
Other operating income: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage banking income |  | 831 |  |  | 1,140 |  |  | 1,172 |  |  | 1,902 |  |  | 1,327 |  |  | 3,143 |  |  | 5,830 |
Service charges on deposit accounts |  | 2,138 |  |  | 2,026 |  |  | 1,861 |  |  | 1,800 |  |  | 1,637 |  |  | 6,025 |  |  | 4,558 |
Other service charges and fees |  | 4,955 |  |  | 4,610 |  |  | 4,488 |  |  | 5,016 |  |  | 4,942 |  |  | 14,053 |  |  | 13,351 |
Income from fiduciary activities |  | 1,165 |  |  | 1,188 |  |  | 1,154 |  |  | 1,283 |  |  | 1,292 |  |  | 3,507 |  |  | 3,792 |
Net gain on sales of investment securities |  | — |  |  | 8,506 |  |  | — |  |  | — |  |  | 100 |  |  | 8,506 |  |  | 150 |
Income from bank-owned life insurance |  | 167 |  |  | (1,028) |  |  | 539 |  |  | 946 |  |  | 540 |  |  | (322) |  |  | 2,547 |
Other |  | 373 |  |  | 696 |  |  | 337 |  |  | 619 |  |  | 415 |  |  | 1,406 |  |  | 1,266 |
Total other operating income |  | 9,629 |  |  | 17,138 |  |  | 9,551 |  |  | 11,566 |  |  | 10,253 |  |  | 36,318 |  |  | 31,494 |
Other operating expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  | 22,778 |  |  | 22,369 |  |  | 20,942 |  |  | 23,030 |  |  | 23,566 |  |  | 66,089 |  |  | 67,183 |
Net occupancy |  | 4,743 |  |  | 4,448 |  |  | 3,774 |  |  | 4,129 |  |  | 4,185 |  |  | 12,965 |  |  | 12,004 |
Equipment |  | 1,085 |  |  | 1,075 |  |  | 1,082 |  |  | 1,207 |  |  | 1,089 |  |  | 3,242 |  |  | 3,137 |
Communication |  | 712 |  |  | 744 |  |  | 806 |  |  | 922 |  |  | 824 |  |  | 2,262 |  |  | 2,349 |
Legal and professional services |  | 2,573 |  |  | 2,916 |  |  | 2,626 |  |  | 2,928 |  |  | 2,575 |  |  | 8,115 |  |  | 7,524 |
Computer software |  | 4,138 |  |  | 3,624 |  |  | 3,082 |  |  | 3,125 |  |  | 2,998 |  |  | 10,844 |  |  | 10,179 |
Advertising |  | 1,150 |  |  | 1,150 |  |  | 1,150 |  |  | 1,179 |  |  | 1,329 |  |  | 3,450 |  |  | 4,316 |
Other |  | 4,819 |  |  | 9,023 |  |  | 4,743 |  |  | 5,902 |  |  | 4,779 |  |  | 18,585 |  |  | 13,932 |
Total other operating expense |  | 41,998 |  |  | 45,349 |  |  | 38,205 |  |  | 42,422 |  |  | 41,345 |  |  | 125,552 |  |  | 120,624 |
Income before income taxes |  | 22,634 |  |  | 23,778 |  |  | 25,476 |  |  | 29,932 |  |  | 27,629 |  |  | 71,888 |  |  | 75,720 |
Income tax expense |  | 5,919 |  |  | 6,184 |  |  | 6,038 |  |  | 7,605 |  |  | 6,814 |  |  | 18,141 |  |  | 18,153 |
Net income |  | $ | 16,715 |  |  | $ | 17,594 |  |  | $ | 19,438 |  |  | $ | 22,327 |  |  | $ | 20,815 |  |  | $ | 53,747 |  |  | $ | 57,567 |
Per common share data: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings per share |  | $ | 0.61 |  |  | $ | 0.64 |  |  | $ | 0.70 |  |  | $ | 0.80 |  |  | $ | 0.74 |  |  | $ | 1.96 |  |  | $ | 2.05 |
Diluted earnings per share |  | 0.61 |  |  | 0.64 |  |  | 0.70 |  |  | 0.80 |  |  | 0.74 |  |  | 1.94 |  |  | 2.03 |
Cash dividends declared |  | 0.26 |  |  | 0.26 |  |  | 0.26 |  |  | 0.25 |  |  | 0.24 |  |  | 0.78 |  |  | 0.71 |
Basic weighted average shares outstanding |  | 27,356,614 |  |  | 27,516,284 |  |  | 27,591,390 |  |  | 27,769,651 |  |  | 27,967,089 |  |  | 27,487,237 |  |  | 28,082,632 |
Diluted weighted average shares outstanding |  | 27,501,212 |  |  | 27,676,619 |  |  | 27,874,924 |  |  | 28,045,826 |  |  | 28,175,953 |  |  | 27,666,197 |  |  | 28,316,574 |
Note: Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period.

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent) |
(Unaudited) | TABLE 4

|  | Three Months Ended |  | Three Months Ended |  | Three Months Ended
|  | September 30, 2022 |  | June 30, 2022 |  | September 30, 2021
|  | 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 financial institutions |  | $ | 19,802 |  |  | 2.14 | % |  | $ | 107 |  |  | $ | 106,083 |  |  | 0.72 | % |  | $ | 191 |  |  | $ | 273,039 |  |  | 0.15 | % |  | $ | 105 |
Investment securities, excluding valuation allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Taxable |  | 1,445,781 |  |  | 1.92 |  |  | 6,934 |  |  | 1,487,129 |  |  | 1.89 |  |  | 7,034 |  |  | 1,351,272 |  |  | 1.84 |  |  | 6,228 |
Tax-exempt [1] |  | 158,052 |  |  | 2.57 |  |  | 1,018 |  |  | 159,087 |  |  | 2.57 |  |  | 1,023 |  |  | 106,333 |  |  | 2.24 |  |  | 595 |
Total investment securities |  | 1,603,833 |  |  | 1.98 |  |  | 7,952 |  |  | 1,646,216 |  |  | 1.96 |  |  | 8,057 |  |  | 1,457,605 |  |  | 1.87 |  |  | 6,823 |
Loans, including loans held for sale |  | 5,355,088 |  |  | 3.84 |  |  | 51,686 |  |  | 5,221,300 |  |  | 3.60 |  |  | 46,963 |  |  | 5,022,909 |  |  | 4.05 |  |  | 51,104 |
Federal Home Loan Bank stock |  | 13,050 |  |  | 4.23 |  |  | 138 |  |  | 8,957 |  |  | 3.02 |  |  | 68 |  |  | 8,090 |  |  | 3.09 |  |  | 62 |
Total interest-earning assets |  | 6,991,773 |  |  | 3.41 |  |  | 59,883 |  |  | 6,982,556 |  |  | 3.17 |  |  | 55,279 |  |  | 6,761,643 |  |  | 3.42 |  |  | 58,094 |
Noninterest-earning assets |  | 328,978 |  |  |  |  |  |  | 327,383 |  |  |  |  |  |  | 448,567 |  |  |  |  |
Total assets |  | $ | 7,320,751 |  |  |  |  |  |  | $ | 7,309,939 |  |  |  |  |  |  | $ | 7,210,210 |  |  |  |  |
LIABILITIES AND EQUITY
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing demand deposits |  | $ | 1,450,434 |  |  | 0.06 | % |  | $ | 217 |  |  | $ | 1,435,088 |  |  | 0.04 | % |  | $ | 144 |  |  | $ | 1,356,967 |  |  | 0.03 | % |  | $ | 101 |
Savings and money market deposits |  | 2,208,037 |  |  | 0.19 |  |  | 1,054 |  |  | 2,204,934 |  |  | 0.06 |  |  | 317 |  |  | 2,168,055 |  |  | 0.06 |  |  | 332 |
Time deposits up to $250,000 |  | 228,707 |  |  | 0.42 |  |  | 245 |  |  | 217,605 |  |  | 0.27 |  |  | 148 |  |  | 228,762 |  |  | 0.31 |  |  | 181 |
Time deposits over $250,000 |  | 443,178 |  |  | 0.76 |  |  | 847 |  |  | 478,483 |  |  | 0.29 |  |  | 342 |  |  | 467,289 |  |  | 0.21 |  |  | 247 |
Total interest-bearing deposits |  | 4,330,356 |  |  | 0.22 |  |  | 2,363 |  |  | 4,336,110 |  |  | 0.09 |  |  | 951 |  |  | 4,221,073 |  |  | 0.08 |  |  | 861 |
Federal Home Loan Bank advances and other short-term borrowings |  | 102,777 |  |  | 2.55 |  |  | 660 |  |  | 363 |  |  | 1.84 |  |  | 2 |  |  | — |  |  | — |  |  | — |
Long-term debt |  | 105,760 |  |  | 4.80 |  |  | 1,281 |  |  | 105,699 |  |  | 4.30 |  |  | 1,133 |  |  | 105,516 |  |  | 3.84 |  |  | 1,022 |
Total interest-bearing liabilities |  | 4,538,893 |  |  | 0.38 |  |  | 4,304 |  |  | 4,442,172 |  |  | 0.19 |  |  | 2,086 |  |  | 4,326,589 |  |  | 0.17 |  |  | 1,883 |
Noninterest-bearing deposits |  | 2,204,965 |  |  |  |  |  |  | 2,290,352 |  |  |  |  |  |  | 2,203,695 |  |  |  |  |
Other liabilities |  | 115,565 |  |  |  |  |  |  | 105,979 |  |  |  |  |  |  | 118,272 |  |  |  |  |
Total liabilities |  | 6,859,423 |  |  |  |  |  |  | 6,838,503 |  |  |  |  |  |  | 6,648,556 |  |  |  |  |
Shareholders’ equity |  | 461,328 |  |  |  |  |  |  | 471,420 |  |  |  |  |  |  | 561,606 |  |  |  |  |
Non-controlling interest |  | — |  |  |  |  |  |  | 16 |  |  |  |  |  |  | 48 |  |  |  |  |
Total equity |  | 461,328 |  |  |  |  |  |  | 471,436 |  |  |  |  |  |  | 561,654 |  |  |  |  |
Total liabilities and equity |  | $ | 7,320,751 |  |  |  |  |  |  | $ | 7,309,939 |  |  |  |  |  |  | $ | 7,210,210 |  |  |  |  |
Net interest income |  |  |  |  |  | $ | 55,579 |  |  |  |  |  |  | $ | 53,193 |  |  |  |  |  |  | $ | 56,211 |
Interest rate spread |  |  |  | 3.03 | % |  |  |  |  |  | 2.98 | % |  |  |  |  |  | 3.25 | % |  |
Net interest margin |  |  |  | 3.17 | % |  |  |  |  |  | 3.05 | % |  |  |  |  |  | 3.31 | % |  |
[1] Interest income and resultant yield information for tax-exempt investment securities is expressed on a taxable-equivalent basis using a federal statutory tax rate of 21%.

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent) |
(Unaudited) | TABLE 5

|  | Nine Months Ended |  | Nine Months Ended
|  | September 30, 2022 |  | September 30, 2021
|  | Average |  | Average |  |  |  | Average |  | Average |  |
(Dollars in thousands) |  | Balance |  | Yield/Rate |  | Interest |  | Balance |  | Yield/Rate |  | Interest
ASSETS
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits in other financial institutions |  | $ | 94,076 |  |  | 0.53 | % |  | $ | 370 |  |  | $ | 180,646 |  |  | 0.13 | % |  | $ | 176 |
Investment securities, excluding valuation allowance: |  |  |  |  |  |  |  |  |  |  |  |
Taxable |  | 1,473,989 |  |  | 1.90 |  |  | 20,958 |  |  | 1,202,564 |  |  | 1.75 |  |  | 15,817 |
Tax-exempt [1] |  | 160,144 |  |  | 2.56 |  |  | 3,073 |  |  | 97,613 |  |  | 2.30 |  |  | 1,684 |
Total investment securities |  | 1,634,133 |  |  | 1.96 |  |  | 24,031 |  |  | 1,300,177 |  |  | 1.79 |  |  | 17,501 |
Loans, including loans held for sale |  | 5,231,098 |  |  | 3.67 |  |  | 143,598 |  |  | 5,070,993 |  |  | 3.85 |  |  | 146,202 |
Federal Home Loan Bank stock |  | 10,019 |  |  | 3.53 |  |  | 265 |  |  | 7,924 |  |  | 3.11 |  |  | 184 |
Total interest-earning assets |  | 6,969,326 |  |  | 3.22 |  |  | 168,264 |  |  | 6,559,740 |  |  | 3.34 |  |  | 164,063 |
Noninterest-earning assets |  | 354,270 |  |  |  |  |  |  | 438,294 |  |  |  |  |
Total assets |  | $ | 7,323,596 |  |  |  |  |  |  | $ | 6,998,034 |  |  |  |  |
LIABILITIES AND EQUITY
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing demand deposits |  | $ | 1,437,034 |  |  | 0.04 | % |  | $ | 473 |  |  | $ | 1,271,825 |  |  | 0.03 | % |  | $ | 280 |
Savings and money market deposits |  | 2,208,449 |  |  | 0.10 |  |  | 1,700 |  |  | 2,057,194 |  |  | 0.06 |  |  | 888 |
Time deposits up to $250,000 |  | 223,343 |  |  | 0.33 |  |  | 548 |  |  | 232,474 |  |  | 0.36 |  |  | 619 |
Time deposits over $250,000 |  | 461,180 |  |  | 0.44 |  |  | 1,503 |  |  | 579,984 |  |  | 0.21 |  |  | 895 |
Total interest-bearing deposits |  | 4,330,006 |  |  | 0.13 |  |  | 4,224 |  |  | 4,141,477 |  |  | 0.09 |  |  | 2,682 |
Federal Home Loan Bank advances and other short-term borrowings |  | 34,756 |  |  | 2.55 |  |  | 662 |  |  | 810 |  |  | 0.30 |  |  | 2 |
Long-term debt |  | 105,699 |  |  | 4.37 |  |  | 3,455 |  |  | 105,458 |  |  | 3.90 |  |  | 3,074 |
Total interest-bearing liabilities |  | 4,470,461 |  |  | 0.25 |  |  | 8,341 |  |  | 4,247,745 |  |  | 0.18 |  |  | 5,758 |
Noninterest-bearing deposits |  | 2,250,496 |  |  |  |  |  |  | 2,077,895 |  |  |  |  |
Other liabilities |  | 112,478 |  |  |  |  |  |  | 117,113 |  |  |  |  |
Total liabilities |  | 6,833,435 |  |  |  |  |  |  | 6,442,753 |  |  |  |  |
Shareholders’ equity |  | 490,140 |  |  |  |  |  |  | 555,264 |  |  |  |  |
Non-controlling interest |  | 21 |  |  |  |  |  |  | 17 |  |  |  |  |
Total equity |  | 490,161 |  |  |  |  |  |  | 555,281 |  |  |  |  |
Total liabilities and equity |  | $ | 7,323,596 |  |  |  |  |  |  | $ | 6,998,034 |  |  |  |  |
Net interest income |  |  |  |  |  | $ | 159,923 |  |  |  |  |  |  | $ | 158,305 |
Interest rate spread |  |  |  | 2.97 | % |  |  |  |  |  | 3.16 | % |  |
Net interest margin |  |  |  | 3.06 | % |  |  |  |  |  | 3.22 | % |  |
[1] Interest income and resultant yield information for tax-exempt investment securities is expressed on a taxable-equivalent basis using a federal statutory tax rate of 21%.

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
Loans by Geographic Distribution |
(Unaudited) | TABLE 6

|  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31, |  | Sep 30,
(Dollars in thousands) |  | 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021
HAWAII: |  |  |  |  |  |  |  |  |  |
Commercial, financial and agricultural: |  |  |  |  |  |  |  |  |  |
SBA Paycheck Protection Program |  | $ | 5,208 |  |  | $ | 19,469 |  |  | $ | 43,380 |  |  | $ | 87,459 |  |  | $ | 198,315 |
Other |  | 358,805 |  |  | 367,676 |  |  | 407,559 |  |  | 422,388 |  |  | 404,751 |
Real estate: |  |  |  |  |  |  |  |  |  |
Construction |  | 138,724 |  |  | 134,103 |  |  | 122,329 |  |  | 122,867 |  |  | 128,908 |
Residential mortgage |  | 1,923,068 |  |  | 1,890,783 |  |  | 1,874,048 |  |  | 1,875,980 |  |  | 1,748,729 |
Home equity |  | 719,399 |  |  | 698,209 |  |  | 676,326 |  |  | 637,249 |  |  | 618,951 |
Commercial mortgage |  | 1,002,874 |  |  | 994,405 |  |  | 927,241 |  |  | 922,146 |  |  | 915,746 |
Consumer |  | 347,388 |  |  | 341,213 |  |  | 337,188 |  |  | 333,843 |  |  | 331,987 |
Total loans, net of deferred fees and costs |  | 4,495,466 |  |  | 4,445,858 |  |  | 4,388,071 |  |  | 4,401,932 |  |  | 4,347,387 |
Allowance for credit losses |  | (47,814) |  |  | (51,374) |  |  | (51,521) |  |  | (55,808) |  |  | (62,126) |
Loans, net of allowance for credit losses |  | $ | 4,447,652 |  |  | $ | 4,394,484 |  |  | $ | 4,336,550 |  |  | $ | 4,346,124 |  |  | $ | 4,285,261 |
U.S. MAINLAND: [1] |  |  |  |  |  |  |  |  |  |
Commercial, financial and agricultural: |  |  |  |  |  |  |  |  |  |
SBA Paycheck Protection Program |  | $ | — |  |  | $ | 712 |  |  | $ | 851 |  |  | $ | 3,868 |  |  | $ | 20,356 |
Other |  | 158,474 |  |  | 156,567 |  |  | 136,857 |  |  | 107,733 |  |  | 114,122 |
Real estate: |  |  |  |  |  |  |  |  |  |
Construction |  | 12,872 |  |  | 10,935 |  |  | 988 |  |  | — |  |  | — |
Commercial mortgage |  | 332,872 |  |  | 309,230 |  |  | 316,258 |  |  | 298,058 |  |  | 292,671 |
Consumer |  | 422,528 |  |  | 378,331 |  |  | 331,812 |  |  | 290,058 |  |  | 271,261 |
Total loans, net of deferred fees and costs |  | 926,746 |  |  | 855,775 |  |  | 786,766 |  |  | 699,717 |  |  | 698,410 |
Allowance for credit losses |  | (16,568) |  |  | (13,837) |  |  | (13,233) |  |  | (12,289) |  |  | (12,461) |
Loans, net of allowance for credit losses |  | $ | 910,178 |  |  | $ | 841,938 |  |  | $ | 773,533 |  |  | $ | 687,428 |  |  | $ | 685,949 |
TOTAL: |  |  |  |  |  |  |  |  |  |
Commercial, financial and agricultural: |  |  |  |  |  |  |  |  |  |
SBA Paycheck Protection Program |  | $ | 5,208 |  |  | $ | 20,181 |  |  | $ | 44,231 |  |  | $ | 91,327 |  |  | $ | 218,671 |
Other |  | 517,279 |  |  | 524,243 |  |  | 544,416 |  |  | 530,121 |  |  | 518,873 |
Real estate: |  |  |  |  |  |  |  |  |  |
Construction |  | 151,596 |  |  | 145,038 |  |  | 123,317 |  |  | 122,867 |  |  | 128,908 |
Residential mortgage |  | 1,923,068 |  |  | 1,890,783 |  |  | 1,874,048 |  |  | 1,875,980 |  |  | 1,748,729 |
Home equity |  | 719,399 |  |  | 698,209 |  |  | 676,326 |  |  | 637,249 |  |  | 618,951 |
Commercial mortgage |  | 1,335,746 |  |  | 1,303,635 |  |  | 1,243,499 |  |  | 1,220,204 |  |  | 1,208,417 |
Consumer |  | 769,916 |  |  | 719,544 |  |  | 669,000 |  |  | 623,901 |  |  | 603,248 |
Total loans, net of deferred fees and costs |  | 5,422,212 |  |  | 5,301,633 |  |  | 5,174,837 |  |  | 5,101,649 |  |  | 5,045,797 |
Allowance for credit losses |  | (64,382) |  |  | (65,211) |  |  | (64,754) |  |  | (68,097) |  |  | (74,587) |
Loans, net of allowance for credit losses |  | $ | 5,357,830 |  |  | $ | 5,236,422 |  |  | $ | 5,110,083 |  |  | $ | 5,033,552 |  |  | $ | 4,971,210 |
[1] U.S. Mainland includes territories of the United States.

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
Deposits |
(Unaudited) | TABLE 7

|  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31, |  | Sep 30,
(Dollars in thousands) |  | 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021
Noninterest-bearing demand |  | $ | 2,138,083 |  |  | $ | 2,282,967 |  |  | $ | 2,269,562 |  |  | $ | 2,291,246 |  |  | $ | 2,195,404 |
Interest-bearing demand |  | 1,441,302 |  |  | 1,444,566 |  |  | 1,433,284 |  |  | 1,415,277 |  |  | 1,372,626 |
Savings and money market |  | 2,194,991 |  |  | 2,214,146 |  |  | 2,197,647 |  |  | 2,225,903 |  |  | 2,296,968 |
Time deposits less than $100,000 |  | 153,238 |  |  | 129,103 |  |  | 132,712 |  |  | 136,584 |  |  | 139,358 |
Other time deposits $100,000 to $250,000 |  | 108,723 |  |  | 84,840 |  |  | 87,838 |  |  | 88,873 |  |  | 87,491 |
Core deposits |  | 6,036,337 |  |  | 6,155,622 |  |  | 6,121,043 |  |  | 6,157,883 |  |  | 6,091,847 |
Government time deposits |  | 195,057 |  |  | 165,000 |  |  | 188,000 |  |  | 214,950 |  |  | 238,950 |
Other time deposits greater than $250,000 |  | 325,040 |  |  | 301,439 |  |  | 289,988 |  |  | 266,325 |  |  | 185,066 |
Total time deposits greater than $250,000 |  | 520,097 |  |  | 466,439 |  |  | 477,988 |  |  | 481,275 |  |  | 424,016 |
Total deposits |  | $ | 6,556,434 |  |  | $ | 6,622,061 |  |  | $ | 6,599,031 |  |  | $ | 6,639,158 |  |  | $ | 6,515,863 |

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
Nonperforming Assets, Past Due and Restructured Loans |
(Unaudited) | TABLE 8

|  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31, |  | Sep 30,
(Dollars in thousands) |  | 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021
Nonaccrual loans: [1] |  |  |  |  |  |  |  |  |  |
Commercial, financial and agricultural - Other |  | $ | 277 |  |  | $ | 333 |  |  | $ | 293 |  |  | $ | 183 |  |  | $ | 689 |
Real estate: |  |  |  |  |  |  |  |  |  |
Residential mortgage |  | 2,771 |  |  | 3,490 |  |  | 3,804 |  |  | 4,623 |  |  | 5,351 |
Home equity |  | 584 |  |  | 592 |  |  | 820 |  |  | 786 |  |  | 880 |
Consumer |  | 588 |  |  | 568 |  |  | 419 |  |  | 289 |  |  | 317 |
Total nonaccrual loans |  | 4,220 |  |  | 4,983 |  |  | 5,336 |  |  | 5,881 |  |  | 7,237 |
Other real estate owned ("OREO"): |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |
Residential mortgage |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total OREO |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total nonperforming assets ("NPAs") |  | 4,220 |  |  | 4,983 |  |  | 5,336 |  |  | 5,881 |  |  | 7,237 |
Loans delinquent for 90 days or more still accruing interest: [1] |  |  |  |  |  |  |  |  |  |
Commercial, financial and agricultural - Other |  | 669 |  |  | 309 |  |  | 592 |  |  | 945 |  |  | — |
Real estate: |  |  |  |  |  |  |  |  |  |
Residential mortgage |  | 503 |  |  | — |  |  | 111 |  |  | — |  |  | 444 |
Home equity |  | — |  |  | — |  |  | — |  |  | 44 |  |  | — |
Consumer |  | 623 |  |  | 842 |  |  | 621 |  |  | 374 |  |  | 166 |
Total loans delinquent for 90 days or more still accruing interest |  | 1,795 |  |  | 1,151 |  |  | 1,324 |  |  | 1,363 |  |  | 610 |
Restructured loans still accruing interest: [1] |  |  |  |  |  |  |  |  |  |
Commercial, financial and agricultural - Other |  | — |  |  | — |  |  | — |  |  | — |  |  | 12 |
Real estate: |  |  |  |  |  |  |  |  |  |
Residential mortgage |  | 2,030 |  |  | 2,006 |  |  | 2,751 |  |  | 3,768 |  |  | 4,458 |
Commercial mortgage |  | 925 |  |  | 965 |  |  | 1,004 |  |  | 1,043 |  |  | 1,577 |
Consumer |  | 69 |  |  | 76 |  |  | 83 |  |  | 92 |  |  | 99 |
Total restructured loans still accruing interest |  | 3,024 |  |  | 3,047 |  |  | 3,838 |  |  | 4,903 |  |  | 6,146 |
Total NPAs and loans delinquent for 90 days or more and restructured loans still accruing interest |  | $ | 9,039 |  |  | $ | 9,181 |  |  | $ | 10,498 |  |  | $ | 12,147 |  |  | $ | 13,993 |
Total nonaccrual loans as a percentage of total loans |  | 0.08 | % |  | 0.09 | % |  | 0.10 | % |  | 0.12 | % |  | 0.14 | %
Total NPAs as a percentage of total loans and OREO |  | 0.08 | % |  | 0.09 | % |  | 0.10 | % |  | 0.12 | % |  | 0.14 | %
Total NPAs and loans delinquent for 90 days or more still accruing interest as a percentage of total loans and OREO |  | 0.11 | % |  | 0.12 | % |  | 0.13 | % |  | 0.14 | % |  | 0.16 | %
Total NPAs, loans delinquent for 90 days or more and restructured loans still accruing interest as a percentage of total loans and OREO |  | 0.17 | % |  | 0.17 | % |  | 0.20 | % |  | 0.24 | % |  | 0.28 | %
Quarter-to-quarter changes in NPAs: |  |  |  |  |  |  |  |  |  |
Balance at beginning of quarter |  | $ | 4,983 |  |  | $ | 5,336 |  |  | $ | 5,881 |  |  | $ | 7,237 |  |  | $ | 6,745 |
Additions |  | 1,072 |  |  | 1,881 |  |  | 1,659 |  |  | 1,375 |  |  | 1,951 |
Reductions: |  |  |  |  |  |  |  |  |  |
Payments |  | (329) |  |  | (285) |  |  | (1,598) |  |  | (933) |  |  | (767) |
Return to accrual status |  | (616) |  |  | (979) |  |  | (38) |  |  | (1,034) |  |  | (141) |
Charge-offs, valuation and other adjustments |  | (890) |  |  | (970) |  |  | (568) |  |  | (764) |  |  | (551) |
Total reductions |  | (1,835) |  |  | (2,234) |  |  | (2,204) |  |  | (2,731) |  |  | (1,459) |
Balance at end of quarter |  | $ | 4,220 |  |  | $ | 4,983 |  |  | $ | 5,336 |  |  | $ | 5,881 |  |  | $ | 7,237 |
[1] Section 4013 of the CARES Act and the revised Interagency Statement were applied to loan modifications related to the COVID-19 pandemic as eligible and applicable. This relief ended on January 1, 2022. These loan modifications were not included in the delinquent or restructured loan balances presented above.

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
Allowance for Credit Losses on Loans |
(Unaudited) | TABLE 9

|  | Three Months Ended |  | Nine Months Ended
|  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31, |  | Sep 30, |  | September 30,
(Dollars in thousands) |  | 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2022 |  | 2021
Allowance for credit losses ("ACL"): |  |  |  |  |  |  |  |  |  |  |  |  |  |
ACL at beginning of period |  | $ | 65,211 |  |  | $ | 64,754 |  |  | $ | 68,097 |  |  | $ | 74,587 |  |  | $ | 77,781 |  |  | $ | 68,097 |  |  | $ | 83,269 |
(Credit) provision for credit losses on loans [1] |  | 731 |  |  | 1,456 |  |  | (2,931) |  |  | (7,417) |  |  | (2,969) |  |  | (744) |  |  | (6,906) |
Charge-offs: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial and agricultural - Other |  | 550 |  |  | 487 |  |  | 254 |  |  | 379 |  |  | 334 |  |  | 1,291 |  |  | 1,344 |
Consumer |  | 1,912 |  |  | 1,390 |  |  | 1,216 |  |  | 952 |  |  | 829 |  |  | 4,518 |  |  | 3,450 |
Total charge-offs |  | 2,462 |  |  | 1,877 |  |  | 1,470 |  |  | 1,331 |  |  | 1,163 |  |  | 5,809 |  |  | 4,794 |
Recoveries: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial and agricultural - Other |  | 220 |  |  | 215 |  |  | 350 |  |  | 358 |  |  | 281 |  |  | 785 |  |  | 646 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | 14 |  |  | 62 |  |  | — |  |  | 1,159 |  |  | — |  |  | 76 |  |  | — |
Residential mortgage |  | 14 |  |  | 36 |  |  | 112 |  |  | 13 |  |  | 53 |  |  | 162 |  |  | 345 |
Home equity |  | 36 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 36 |  |  | 9 |
Commercial mortgage |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 73 |
Consumer |  | 618 |  |  | 565 |  |  | 596 |  |  | 728 |  |  | 604 |  |  | 1,779 |  |  | 1,945 |
Total recoveries |  | 902 |  |  | 878 |  |  | 1,058 |  |  | 2,258 |  |  | 938 |  |  | 2,838 |  |  | 3,018 |
Net charge-offs (recoveries) |  | 1,560 |  |  | 999 |  |  | 412 |  |  | (927) |  |  | 225 |  |  | 2,971 |  |  | 1,776 |
ACL at end of period |  | $ | 64,382 |  |  | $ | 65,211 |  |  | $ | 64,754 |  |  | $ | 68,097 |  |  | $ | 74,587 |  |  | $ | 64,382 |  |  | $ | 74,587 |
Average loans, net of deferred fees and costs |  | $ | 5,355,088 |  |  | $ | 5,221,300 |  |  | $ | 5,114,260 |  |  | $ | 5,073,069 |  |  | $ | 5,022,909 |  |  | $ | 5,231,098 |  |  | $ | 5,070,993 |
Annualized ratio of net charge-offs to average loans |  | 0.12 | % |  | 0.08 | % |  | 0.03 | % |  | (0.07) | % |  | 0.02 | % |  | 0.08 | % |  | 0.05 | %
[1] As of January 1, 2021, the provision for credit losses on off-balance sheet credit exposures (previously included in other operating expense) is included in the provision for credit losses line on the consolidated statements of income. The allowance for off-balance sheet credit exposures continues to be included in other liabilities. For roll-forward purposes, in this table we exclude the provision for credit losses on off-balance sheet credit exposures.