EX-99.1 2 exhibit99-1erq42022.htm EX-99.1

Document

Exhibit 99.1

									FOR IMMEDIATE RELEASE
Investor Contact:			Ian Tanaka			Media Contact:			Tim Sakahara
			SVP, Treasurer						AVP, Corporate Communications Manager
			(808) 544-3646						(808) 544-5125
			ian.tanaka@cpb.bank						tim.sakahara@cpb.bank

NEWS RELEASE

CENTRAL PACIFIC FINANCIAL REPORTS FOURTH QUARTER EARNINGS OF $20.2 MILLION

AND FULL YEAR 2022 EARNINGS OF $73.9 MILLION

•Net income of $20.2 million, or $0.74 per diluted share for the fourth quarter. Net income of $73.9 million, or $2.68 per diluted share for the 2022 year.

•ROA of 1.09% and ROE of 18.30% for the fourth quarter. ROA of 1.01% and ROE of 15.47% for the 2022 year.

•Total loans of $5.56 billion increased by $133.3 million, or 2.5% (10.0% annualized) in the fourth quarter. Total loans increased by $453.8 million, or 8.9% for the 2022 year.

•Total deposits of $6.74 billion increased by $179.8 million, or 2.7% (10.8% annualized) in the fourth quarter. Total deposits increased by $97.1 million, or 1.5% for the 2022 year.

•Net interest income increased by $0.9 million, or 1.7% from the previous quarter. Net interest margin of 3.17% was consistent with the previous quarter. Net interest margin, excluding PPP loans, of 3.16% increased by 3 bps from the previous quarter.

•Board of Directors approved quarterly cash dividend of $0.26 per share and new $25 million share repurchase program.

HONOLULU, HI, January 25, 2023 – Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income for the fourth quarter of 2022 of $20.2 million, compared to $16.7 million in the previous quarter and $22.3 million in the year-ago quarter. Fully diluted earnings per share ("EPS") of $0.74 for the fourth quarter of 2022 reflected a 21% increase from $0.61 in the previous quarter and a 8% decrease from $0.80 in the year-ago quarter. For the 2022 year, net income was $73.9 million, or EPS of $2.68, compared to net income of $79.9 million, or EPS of $2.83 last year.

"We ended the 2022 year successfully with strong loan, deposit and net interest income growth," said Arnold Martines, President and Chief Executive Officer. "At the same time, we continued to have solid asset quality, liquidity and capital positions. We believe the Hawaii economy will be resilient and fare better than the rest of the country because of our strong housing and tourism markets, as well as the large military presence in our State. I would like to thank our hard-working and committed team of employees, as well as our customers for their ongoing support of our bank."

Central Pacific Financial Reports Fourth Quarter Earnings of $20.2 Million and Full Year 2022 Earnings of $73.9 Million

Page 2

Earnings Highlights

Net interest income for the fourth quarter of 2022 was $56.3 million, an increase of $0.9 million, or 1.7% from the previous quarter, and an increase of $3.2 million, or 6.0% from the year-ago quarter. The sequential quarter increase in net interest income is primarily due to higher asset yields and continued strong loan growth which outpaced the increase in rates paid on deposits. Net interest income in the fourth quarter of 2022 included $0.1 million in net PPP interest income and fees, compared to $0.7 million and $4.7 million, in the previous and year-ago quarters, respectively. Net interest income for the 2022 year included $3.6 million in net PPP interest income and fees, compared to $26.4 million for the 2021 year.

Net interest margin ("NIM") for the fourth quarter of 2022 was 3.17%, which remained unchanged from the previous quarter and increased by 9 basis points ("bps") from the year-ago quarter. NIM, excluding PPP loans, of 3.16% increased by 3 bps from the previous quarter. The increase in NIM, excluding PPP loans, was primarily attributable to higher yields earned during the quarter on investment securities and core loans, or total loans excluding PPP loans, partially offset by increases in rates paid on deposits and borrowings. Additional information on average balances, interest income and expenses and yields and rates is presented in Tables 4, 5 and 10.

In the fourth quarter of 2022, the Company recorded a provision for credit losses of $0.6 million, compared to a provision of $0.4 million in the previous quarter and a release of the credit loss reserves of $7.7 million in the year-ago quarter.

Other operating income for the fourth quarter of 2022 totaled $11.6 million, compared to $9.6 million in the previous quarter and $11.6 million in the year-ago quarter. The increase from the previous quarter was primarily due to higher income from bank-owned life insurance. Additional information on other operating income is presented in Table 3.

Other operating expense for the fourth quarter of 2022 totaled $40.4 million, compared to $42.0 million in the previous quarter and $42.4 million in the year-ago quarter. The decrease in other operating expense from the previous quarter was primarily due to lower net occupancy and advertising expenses. Additional information on other operating expense is presented in Table 3.

The efficiency ratio for the fourth quarter of 2022 was 59.56%, compared to 64.62% in the previous quarter and 65.61% in the year-ago quarter.

The effective tax rate for the fourth quarter of 2022 was 24.9%, compared to 26.2% in the previous quarter and 25.4% in the year-ago quarter.

Balance Sheet Highlights

Total assets at December 31, 2022 of $7.43 billion increased by $95.1 million, or 1.3% from $7.34 billion at September 30, 2022, and increased by $13.7 million, or 0.2% from $7.42 billion at December 31, 2021.

Total loans, net of deferred fees and costs, at December 31, 2022 of $5.56 billion increased by $133.3 million, or 2.5% from $5.42 billion at September 30, 2022, and increased by $453.8 million, or 8.9%, from $5.10 billion at December 31, 2021. Loans by type and geographic distribution are summarized in Table 6.

Total deposits at December 31, 2022 of $6.74 billion increased by $179.8 million or 2.7% from $6.56 billion at September 30, 2022, and increased by $97.1 million, or 1.5%, from $6.64 billion at December 31, 2021. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $6.08 billion at December 31, 2022, and increased by $38.8 million from September 30, 2022. Core deposit and total deposit balances are summarized in Table 7.

Asset Quality

Nonperforming assets at December 31, 2022 totaled $5.3 million, or 0.07% of total assets, compared to $4.2 million, or 0.06% of total assets at September 30, 2022, and $5.9 million, or 0.08% of total assets at December 31, 2021. Additional information on nonperforming assets, past due and restructured loans is presented in Table 8.

Net charge-offs in the fourth quarter of 2022 totaled $1.7 million, compared to net charge-offs of $1.6 million in the previous quarter, and net recoveries of $0.9 million in the year-ago quarter.

The allowance for credit losses, as a percentage of total loans at December 31, 2022 was 1.15%, compared to 1.19% at September 30, 2022, and 1.33% at December 31, 2021. Additional information on net charge-offs and recoveries and the allowance for credit losses is presented in Table 9.

Central Pacific Financial Reports Fourth Quarter Earnings of $20.2 Million and Full Year 2022 Earnings of $73.9 Million

Page 3

Capital

Total shareholders' equity was $452.9 million at December 31, 2022, compared to $438.5 million and $558.2 million at September 30, 2022 and December 31, 2021, respectively. The decline in shareholders' equity from a year ago was primarily due to an increase in unrealized losses on our available-for-sale investment securities portfolio which is included in accumulated other comprehensive income, and were driven by the rising interest rate environment.

At December 31, 2022, the Company's leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ratios were 8.5%, 11.3%, 13.5%, and 10.5%, respectively, compared to 8.7%, 11.5%, 13.7%, and 10.6%, respectively, at September 30, 2022.

On January 24, 2023, 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 March 15, 2023 to shareholders of record at the close of business on February 28, 2023.

On January 24, 2023, the Company's Board of Directors also authorized the repurchase of up to $25 million of its common stock from time to time in the open market or in privately negotiated transactions, pursuant to a newly authorized share repurchase program (the "Repurchase Plan"). The Repurchase Plan replaces and supersedes in its entirety the share repurchase program previously approved by the Company's Board of Directors, which had $10.3 million in remaining repurchase authority as of December 31, 2022. During the fourth quarter of 2022, the Company repurchased 241,203 shares of common stock, at a total cost of $4.9 million, or an average cost per share of $20.41. During the year ended December 31, 2022, the Company returned $49.2 million in capital to its shareholders through cash dividends and share repurchases.

Key Business Highlights during the fourth quarter included the following:

•Arnold Martines, a veteran of the local banking industry and Central Pacific Bank, was promoted to President & CEO of Central Pacific Bank and Central Pacific Financial.

•Newsweek named Central Pacific Bank one of the Best Banks in Hawaii.

•Jason Fujimoto, President & CEO of HPM Building Supply on the island of Hawaii, was named to the boards of CPB and CPF.

•The Central Pacific Bank Foundation again contributed generously to the local community with total donations in 2022 of $1.3 million.

•In the community, the Bank launched a major small business marketing campaign aimed at a key customer segment and area of strategic focus for the Bank.

Conference Call

The Company's management will host a conference call today at 1:00 p.m. Eastern Time (8:00 a.m. Hawaii Time) to discuss the quarterly results. Individuals are encouraged to listen to the live webcast of the presentation by visiting the investor relations page of the Company's website at http://ir.cpb.bank. Alternatively, investors may participate in the live call by dialing 1-844-200-6205 (access code: 274117). A playback of the call will be available through February 24, 2023 by dialing 1-866-813-9403 (access code: 649427) 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 $7.43 billion in assets as of December 31, 2022. Central Pacific Bank, its primary subsidiary, operates 27 branches and 64 ATMs in the state of Hawaii. For additional information, please visit the Company's website at http://www.cpb.bank.

**********

Central Pacific Financial Reports Fourth Quarter Earnings of $20.2 Million and Full Year 2022 Earnings of $73.9 Million

Page 4

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) 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; 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																														Year Ended
(Dollars in thousands,						Dec 31,						Sep 30,						Jun 30,						Mar 31,						Dec 31,						Dec 31,
except for per share amounts)						2022						2022						2022						2022						2021						2022						2021
CONDENSED INCOME STATEMENT
Net interest income						$	56,285					$	55,365					$	52,978					$	50,935					$	53,096					$	215,563					$	211,047
Provision (credit) for credit losses						571						362						989						(3,195)						(7,692)						(1,273)						(14,591)
Total other operating income						11,601						9,629						17,138						9,551						11,566						47,919						43,060
Total other operating expense						40,434						41,998						45,349						38,205						42,422						165,986						163,046
Income tax expense						6,700						5,919						6,184						6,038						7,605						24,841						25,758
Net income						20,181						16,715						17,594						19,438						22,327						73,928						79,894
Basic earnings per common share						$	0.74					$	0.61					$	0.64					$	0.70					$	0.80					$	2.70					$	2.85
Diluted earnings per common share						0.74						0.61						0.64						0.70						0.80						2.68						2.83
Dividends declared per common share						0.26						0.26						0.26						0.26						0.25						1.04						0.96
PERFORMANCE RATIOS
Return on average assets (ROA) [1]						1.09		%				0.91		%				0.96		%				1.06		%				1.22		%				1.01		%				1.13		%
Return on average shareholders’ equity (ROE) [1]						18.30						14.49						14.93						14.44						16.05						15.47						14.38
Average shareholders’ equity to average assets						5.97						6.30						6.45						7.34						7.61						6.51						7.85
Efficiency ratio [2]						59.56						64.62						64.68						63.16						65.61						63.00						64.16
Net interest margin (NIM) [1]						3.17						3.17						3.05						2.97						3.08						3.09						3.18
Dividend payout ratio [3]						35.14						42.62						40.63						37.14						31.25						38.81						33.92
SELECTED AVERAGE BALANCES
Average loans, including loans held for sale						$	5,498,800					$	5,355,088					$	5,221,300					$	5,114,260					$	5,073,069					$	5,298,573					$	5,071,516
Average interest-earning assets						7,103,841						6,991,773						6,982,556						6,932,649						6,890,829						7,003,232						6,643,193
Average assets						7,389,712						7,320,751						7,309,939						7,341,850						7,315,325						7,340,261						7,078,025
Average deposits						6,673,922						6,535,321						6,626,462						6,581,593						6,536,826						6,604,049						6,299,369
Average interest-bearing liabilities						4,708,045						4,538,893						4,442,172						4,429,114						4,407,612						4,530,347						4,288,041
Average shareholders’ equity						441,084						461,328						471,420						538,601						556,462						477,775						555,600
[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)

						Dec 31,						Sep 30,						Jun 30,						Mar 31,						Dec 31,
						2022						2022						2022						2022						2021
REGULATORY CAPITAL RATIOS
Central Pacific Financial Corp. (consolidated)
Leverage capital ratio						8.5		%				8.7		%				8.6		%				8.5		%				8.5		%
Tier 1 risk-based capital ratio						11.3						11.5						11.6						11.9						12.2
Total risk-based capital ratio						13.5						13.7						13.9						14.2						14.5
Common equity tier 1 capital ratio						10.5						10.6						10.7						10.9						11.2
Central Pacific Bank
Leverage capital ratio						9.0						9.1						9.0						9.0						8.9
Tier 1 risk-based capital ratio						11.9						12.2						12.2						12.6						12.8
Total risk-based capital ratio						13.1						13.4						13.5						13.8						14.0
Common equity tier 1 capital ratio						11.9						12.2						12.2						12.6						12.8

						Dec 31,						Sep 30,						Jun 30,						Mar 31,						Dec 31,
(dollars in thousands, except for per share amounts)						2022						2022						2022						2022						2021
BALANCE SHEET
Total loans, net of deferred fees and costs						$	5,555,466					$	5,422,212					$	5,301,633					$	5,174,837					$	5,101,649
Total assets						7,432,763						7,337,631						7,299,178						7,298,819						7,419,089
Total deposits						6,736,223						6,556,434						6,622,061						6,599,031						6,639,158
Long-term debt						105,859						105,799						105,738						105,677						105,616
Total shareholders’ equity						452,871						438,468						455,100						486,328						558,219
Total shareholders’ equity to total assets						6.09		%				5.98		%				6.23		%				6.66		%				7.52		%
ASSET QUALITY
Allowance for credit losses (ACL)						$	63,738					$	64,382					$	65,211					$	64,754					$	68,097
Nonaccrual loans						5,251						4,220						4,983						5,336						5,881
Non-performing assets (NPA)						5,251						4,220						4,983						5,336						5,881
ACL to total loans						1.15		%				1.19		%				1.23		%				1.25		%				1.33		%
ACL to nonaccrual loans						1,213.83		%				1,525.64		%				1,308.67		%				1,213.53		%				1,157.92		%
NPA to total assets						0.07		%				0.06		%				0.07		%				0.07		%				0.08		%
PER SHARE OF COMMON STOCK OUTSTANDING
Book value per common share						$	16.76					$	16.08					$	16.57					$	17.63					$	20.14
Closing market price per common share						20.28						20.69						21.45						27.90						28.17

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

						Dec 31,						Sep 30,						Jun 30,						Mar 31,						Dec 31,
(Dollars in thousands, except share data)						2022						2022						2022						2022						2021
ASSETS
Cash and due from financial institutions						$	97,150					$	116,365					$	108,389					$	83,947					$	81,506
Interest-bearing deposits in other financial institutions						14,894						22,332						22,741						118,183						247,401
Investment securities:
Available-for-sale debt securities, at fair value						671,794						686,681						787,373						1,199,482						1,631,699
Held-to-maturity debt securities, at amortized cost; fair value of: $596,781 at December 31, 2022, $590,880 at September 30, 2022, $635,565 at June 30, 2022, $329,503 at March 31, 2022, and none at December 31, 2021						664,883						662,827						663,365						329,507						—
Equity securities, at fair value						—						—						—						—						—
Total investment securities						1,336,677						1,349,508						1,450,738						1,528,989						1,631,699
Loans held for sale						1,105						1,701						535						4,677						3,531
Loans, net of deferred fees and costs						5,555,466						5,422,212						5,301,633						5,174,837						5,101,649
Less: allowance for credit losses						63,738						64,382						65,211						64,754						68,097
Loans, net of allowance for credit losses						5,491,728						5,357,830						5,236,422						5,110,083						5,033,552
Premises and equipment, net						91,634						89,979						88,664						79,455						80,354
Accrued interest receivable						20,345						18,134						17,146						16,423						16,709
Investment in unconsolidated entities						46,641						36,769						37,341						31,092						29,679
Mortgage servicing rights						9,074						9,216						9,369						9,480						9,738
Bank-owned life insurance						167,967						167,761						167,202						167,407						169,148
Federal Home Loan Bank ("FHLB") stock						9,146						13,546						8,943						8,943						7,964
Right of use lease asset						34,985						35,978						36,978						38,435						39,441
Other assets						111,417						118,512						114,710						101,705						68,367
Total assets						$	7,432,763					$	7,337,631					$	7,299,178					$	7,298,819					$	7,419,089
LIABILITIES
Deposits:
Noninterest-bearing demand						$	2,092,823					$	2,138,083					$	2,282,967					$	2,269,562					$	2,291,246
Interest-bearing demand						1,453,167						1,441,302						1,444,566						1,433,284						1,415,277
Savings and money market						2,199,028						2,194,991						2,214,146						2,197,647						2,225,903
Time						991,205						782,058						680,382						698,538						706,732
Total deposits						6,736,223						6,556,434						6,622,061						6,599,031						6,639,158
FHLB advances and other short-term borrowings						5,000						115,000						—						—						—
Long-term debt						105,859						105,799						105,738						105,677						105,616
Lease liability						35,889						36,941						38,037						39,610						40,731
Other liabilities						96,921						84,989						78,242						68,123						75,317
Total liabilities						6,979,892						6,899,163						6,844,078						6,812,441						6,860,822
EQUITY
Shareholders' equity:
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, and December 31, 2021						—						—						—						—						—
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,025,070 at December 31, 2022, 27,262,879 at September 30, 2022, 27,463,562 at June 30, 2022, 27,584,929 at March 31, 2022, and 27,714,071 at December 31, 2021						408,071						412,994						417,862						421,153						426,091
Additional paid-in capital						101,346						100,426						98,977						98,270						98,073
Retained earnings						87,438						74,301						64,693						54,252						42,015
Accumulated other comprehensive loss						(143,984)						(149,253)						(126,432)						(87,347)						(7,960)
Total shareholders' equity						452,871						438,468						455,100						486,328						558,219
Non-controlling interest						—						—						—						50						48
Total equity						452,871						438,468						455,100						486,378						558,267
Total liabilities and equity						$	7,432,763					$	7,337,631					$	7,299,178					$	7,298,819					$	7,419,089

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

						Three Months Ended																														Year Ended
						Dec 31,						Sep 30,						Jun 30,						Mar 31,						Dec 31,						December 31,
(Dollars in thousands, except per share data)						2022						2022						2022						2022						2021						2022						2021
Interest income:
Interest and fees on loans						$	56,682					$	51,686					$	46,963					$	44,949					$	47,576					$	200,280					$	193,778
Interest and dividends on investment securities:
Taxable investment securities						7,104						6,933						7,035						6,969						6,667						28,041						22,430
Tax-exempt investment securities						776						805						807						816						642						3,204						1,972
Dividend income on investment securities						—						—						—						21						21						21						75
Interest on deposits in other financial institutions						370						107						191						72						86						740						262
Dividend income on FHLB stock						105						138						68						59						61						370						245
Total interest income						65,037						59,669						55,064						52,886						55,053						232,656						218,762
Interest expense:
Interest on deposits:
Demand						333						217						144						112						104						806						384
Savings and money market						2,488						1,054						317						329						352						4,188						1,240
Time						4,063						1,092						490						469						478						6,114						1,992
Interest on short-term borrowings						393						660						2						—						—						1,055						2
Interest on long-term debt						1,475						1,281						1,133						1,041						1,023						4,930						4,097
Total interest expense						8,752						4,304						2,086						1,951						1,957						17,093						7,715
Net interest income						56,285						55,365						52,978						50,935						53,096						215,563						211,047
Provision (credit) for credit losses						571						362						989						(3,195)						(7,692)						(1,273)						(14,591)
Net interest income after provision (credit) for credit losses						55,714						55,003						51,989						54,130						60,788						216,836						225,638
Other operating income:
Mortgage banking income						667						831						1,140						1,172						1,902						3,810						7,732
Service charges on deposit accounts						2,172						2,138						2,026						1,861						1,800						8,197						6,358
Other service charges and fees						4,972						4,955						4,610						4,488						5,016						19,025						18,367
Income from fiduciary activities						1,058						1,165						1,188						1,154						1,283						4,565						5,075
Net gain on sales of investment securities						—						—						8,506						—						—						8,506						150
Income from bank-owned life insurance						2,187						167						(1,028)						539						946						1,865						3,493
Other						545						373						696						337						619						1,951						1,885
Total other operating income						11,601						9,629						17,138						9,551						11,566						47,919						43,060
Other operating expense:
Salaries and employee benefits						22,692						22,778						22,369						20,942						23,030						88,781						90,213
Net occupancy						3,998						4,743						4,448						3,774						4,129						16,963						16,133
Equipment						996						1,085						1,075						1,082						1,207						4,238						4,344
Communication						696						712						744						806						922						2,958						3,271
Legal and professional services						2,677						2,573						2,916						2,626						2,928						10,792						10,452
Computer software						3,996						4,138						3,624						3,082						3,125						14,840						13,304
Advertising						701						1,150						1,150						1,150						1,179						4,151						5,495
Other						4,678						4,819						9,023						4,743						5,902						23,263						19,834
Total other operating expense						40,434						41,998						45,349						38,205						42,422						165,986						163,046
Income before income taxes						26,881						22,634						23,778						25,476						29,932						98,769						105,652
Income tax expense						6,700						5,919						6,184						6,038						7,605						24,841						25,758
Net income						$	20,181					$	16,715					$	17,594					$	19,438					$	22,327					$	73,928					$	79,894
Per common share data:
Basic earnings per share						$	0.74					$	0.61					$	0.64					$	0.70					$	0.80					$	2.70					$	2.85
Diluted earnings per share						0.74						0.61						0.64						0.70						0.80						2.68						2.83
Cash dividends declared						0.26						0.26						0.26						0.26						0.25						1.04						0.96
Basic weighted average shares outstanding						27,134,970						27,356,614						27,516,284						27,591,390						27,769,651						27,398,445						28,003,744
Diluted weighted average shares outstanding						27,303,249						27,501,212						27,676,619						27,874,924						28,045,826						27,567,780						28,257,323
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
						December 31, 2022																		September 30, 2022																		December 31, 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						$	38,610					3.80		%				$	370					$	19,802					2.14		%				$	107					$	225,560					0.15		%				$	86
Investment securities, excluding valuation allowance:
Taxable						1,399,627						2.03						7,104						1,445,781						1.92						6,934						1,469,711						1.82						6,688
Tax-exempt [1]						156,079						2.52						982						158,052						2.57						1,018						114,529						2.84						813
Total investment securities						1,555,706						2.08						8,086						1,603,833						1.98						7,952						1,584,240						1.89						7,501
Loans, including loans held for sale						5,498,800						4.10						56,682						5,355,088						3.84						51,686						5,073,069						3.73						47,576
Federal Home Loan Bank stock						10,725						3.90						105						13,050						4.23						138						7,960						3.05						61
Total interest-earning assets						7,103,841						3.66						65,243						6,991,773						3.41						59,883						6,890,829						3.19						55,224
Noninterest-earning assets						285,871																		328,978																		424,496
Total assets						$	7,389,712																	$	7,320,751																	$	7,315,325
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits						$	1,441,787					0.09		%				$	333					$	1,450,434					0.06		%				$	217					$	1,383,696					0.03		%				$	104
Savings and money market deposits						2,209,166						0.45						2,488						2,208,037						0.19						1,054						2,224,592						0.06						352
Time deposits up to $250,000						311,639						1.50						1,174						228,707						0.42						245						225,451						0.31						176
Time deposits over $250,000						595,133						1.93						2,889						443,178						0.76						847						468,292						0.26						302
Total interest-bearing deposits						4,557,725						0.60						6,884						4,330,356						0.22						2,363						4,302,031						0.09						934
Federal Home Loan Bank advances and other short-term borrowings						44,491						3.51						393						102,777						2.55						660						—						—						—
Long-term debt						105,829						5.53						1,475						105,760						4.80						1,281						105,581						3.85						1,023
Total interest-bearing liabilities						4,708,045						0.74						8,752						4,538,893						0.38						4,304						4,407,612						0.18						1,957
Noninterest-bearing deposits						2,116,197																		2,204,965																		2,234,795
Other liabilities						124,386																		115,565																		116,408
Total liabilities						6,948,628																		6,859,423																		6,758,815
Shareholders’ equity						441,084																		461,328																		556,462
Non-controlling interest						—																		—																		48
Total equity						441,084																		461,328																		556,510
Total liabilities and equity						$	7,389,712																	$	7,320,751																	$	7,315,325
Net interest income																		$	56,491																	$	55,579																	$	53,267
Interest rate spread												2.92		%																3.03		%																3.01		%
Net interest margin												3.17		%																3.17		%																3.08		%
[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

						Year Ended																		Year Ended
						December 31, 2022																		December 31, 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						$	80,096					0.92		%				$	740					$	191,967					0.14		%				$	262
Investment securities, excluding valuation allowance:
Taxable						1,455,246						1.93						28,062						1,269,900						1.77						22,505
Tax-exempt [1]						159,120						2.55						4,056						101,877						2.45						2,496
Total investment securities						1,614,366						1.99						32,118						1,371,777						1.82						25,001
Loans, including loans held for sale						5,298,573						3.78						200,280						5,071,516						3.82						193,778
Federal Home Loan Bank stock						10,197						3.63						370						7,933						3.09						245
Total interest-earning assets						7,003,232						3.33						233,508						6,643,193						3.30						219,286
Noninterest-earning assets						337,029																		434,832
Total assets						$	7,340,261																	$	7,078,025
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits						$	1,438,232					0.06		%				$	806					$	1,300,022					0.03		%				$	384
Savings and money market deposits						2,208,630						0.19						4,188						2,099,388						0.06						1,240
Time deposits up to $250,000						245,599						0.70						1,723						230,705						0.34						795
Time deposits over $250,000						494,943						0.89						4,391						551,831						0.22						1,197
Total interest-bearing deposits						4,387,404						0.25						11,108						4,181,946						0.09						3,616
Federal Home Loan Bank advances and other short-term borrowings						37,211						2.84						1,055						607						0.30						2
Long-term debt						105,732						4.66						4,930						105,488						3.88						4,097
Total interest-bearing liabilities						4,530,347						0.38						17,093						4,288,041						0.18						7,715
Noninterest-bearing deposits						2,216,645																		2,117,423
Other liabilities						115,478																		116,936
Total liabilities						6,862,470																		6,522,400
Shareholders’ equity						477,775																		555,600
Non-controlling interest						16																		25
Total equity						477,791																		555,625
Total liabilities and equity						$	7,340,261																	$	7,078,025
Net interest income																		$	216,415																	$	211,571
Interest rate spread												2.95		%																3.12		%
Net interest margin												3.09		%																3.18		%
[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

						Dec 31,						Sep 30,						Jun 30,						Mar 31,						Dec 31,
(Dollars in thousands)						2022						2022						2022						2022						2021
HAWAII:
Commercial, financial and agricultural:
SBA Paycheck Protection Program						$	2,555					$	5,208					$	19,469					$	43,380					$	87,459
Other						383,665						358,805						367,676						407,559						422,388
Real estate:
Construction						150,208						138,724						134,103						122,329						122,867
Residential mortgage						1,940,999						1,923,068						1,890,783						1,874,048						1,875,980
Home equity						739,380						719,399						698,209						676,326						637,249
Commercial mortgage						1,029,708						1,002,874						994,405						927,241						922,146
Consumer						346,789						347,388						341,213						337,188						333,843
Total loans, net of deferred fees and costs						4,593,304						4,495,466						4,445,858						4,388,071						4,401,932
Allowance for credit losses						(45,169)						(47,814)						(51,374)						(51,521)						(55,808)
Loans, net of allowance for credit losses						$	4,548,135					$	4,447,652					$	4,394,484					$	4,336,550					$	4,346,124
U.S. MAINLAND: [1]
Commercial, financial and agricultural:
SBA Paycheck Protection Program						$	—					$	—					$	712					$	851					$	3,868
Other						160,282						158,474						156,567						136,857						107,733
Real estate:
Construction						16,515						12,872						10,935						988						—
Commercial mortgage						333,367						332,872						309,230						316,258						298,058
Consumer						451,998						422,528						378,331						331,812						290,058
Total loans, net of deferred fees and costs						962,162						926,746						855,775						786,766						699,717
Allowance for credit losses						(18,569)						(16,568)						(13,837)						(13,233)						(12,289)
Loans, net of allowance for credit losses						$	943,593					$	910,178					$	841,938					$	773,533					$	687,428
TOTAL:
Commercial, financial and agricultural:
SBA Paycheck Protection Program						$	2,555					$	5,208					$	20,181					$	44,231					$	91,327
Other						543,947						517,279						524,243						544,416						530,121
Real estate:
Construction						166,723						151,596						145,038						123,317						122,867
Residential mortgage						1,940,999						1,923,068						1,890,783						1,874,048						1,875,980
Home equity						739,380						719,399						698,209						676,326						637,249
Commercial mortgage						1,363,075						1,335,746						1,303,635						1,243,499						1,220,204
Consumer						798,787						769,916						719,544						669,000						623,901
Total loans, net of deferred fees and costs						5,555,466						5,422,212						5,301,633						5,174,837						5,101,649
Allowance for credit losses						(63,738)						(64,382)						(65,211)						(64,754)						(68,097)
Loans, net of allowance for credit losses						$	5,491,728					$	5,357,830					$	5,236,422					$	5,110,083					$	5,033,552
[1] U.S. Mainland includes territories of the United States.

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

						Dec 31,						Sep 30,						Jun 30,						Mar 31,						Dec 31,
(Dollars in thousands)						2022						2022						2022						2022						2021
Noninterest-bearing demand						$	2,092,823					$	2,138,083					$	2,282,967					$	2,269,562					$	2,291,246
Interest-bearing demand						1,453,167						1,441,302						1,444,566						1,433,284						1,415,277
Savings and money market						2,199,028						2,194,991						2,214,146						2,197,647						2,225,903
Time deposits less than $100,000						181,547						153,238						129,103						132,712						136,584
Other time deposits $100,000 to $250,000						148,601						108,723						84,840						87,838						88,873
Core deposits						6,075,166						6,036,337						6,155,622						6,121,043						6,157,883
Government time deposits						290,057						195,057						165,000						188,000						214,950
Other time deposits greater than $250,000						371,000						325,040						301,439						289,988						266,325
Total time deposits greater than $250,000						661,057						520,097						466,439						477,988						481,275
Total deposits						$	6,736,223					$	6,556,434					$	6,622,061					$	6,599,031					$	6,639,158

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

						Dec 31,						Sep 30,						Jun 30,						Mar 31,						Dec 31,
(Dollars in thousands)						2022						2022						2022						2022						2021
Nonaccrual loans: [1]
Commercial, financial and agricultural - Other						$	297					$	277					$	333					$	293					$	183
Real estate:
Residential mortgage						3,808						2,771						3,490						3,804						4,623
Home equity						570						584						592						820						786
Consumer						576						588						568						419						289
Total nonaccrual loans						5,251						4,220						4,983						5,336						5,881
Other real estate owned ("OREO"):
Real estate:
Residential mortgage						—						—						—						—						—
Total OREO						—						—						—						—						—
Total nonperforming assets ("NPAs")						5,251						4,220						4,983						5,336						5,881
Loans delinquent for 90 days or more still accruing interest: [1]
Commercial, financial and agricultural - Other						39						669						309						592						945
Real estate:
Residential mortgage						559						503						—						111						—
Home equity						—						—						—						—						44
Consumer						1,240						623						842						621						374
Total loans delinquent for 90 days or more still accruing interest						1,838						1,795						1,151						1,324						1,363
Restructured loans still accruing interest: [1]
Real estate:
Residential mortgage						1,845						2,030						2,006						2,751						3,768
Commercial mortgage						886						925						965						1,004						1,043
Consumer						62						69						76						83						92
Total restructured loans still accruing interest						2,793						3,024						3,047						3,838						4,903
Total NPAs and loans delinquent for 90 days or more and restructured loans still accruing interest						$	9,882					$	9,039					$	9,181					$	10,498					$	12,147
Total nonaccrual loans as a percentage of total loans						0.09		%				0.08		%				0.09		%				0.10		%				0.12		%
Total NPAs as a percentage of total loans and OREO						0.09		%				0.08		%				0.09		%				0.10		%				0.12		%
Total NPAs and loans delinquent for 90 days or more still accruing interest as a percentage of total loans and OREO						0.13		%				0.11		%				0.12		%				0.13		%				0.14		%
Total NPAs, loans delinquent for 90 days or more and restructured loans still accruing interest as a percentage of total loans and OREO						0.18		%				0.17		%				0.17		%				0.20		%				0.24		%
Quarter-to-quarter changes in NPAs:
Balance at beginning of quarter						$	4,220					$	4,983					$	5,336					$	5,881					$	7,237
Additions						2,162						1,072						1,881						1,659						1,375
Reductions:
Payments						(198)						(329)						(285)						(1,598)						(933)
Return to accrual status						(44)						(616)						(979)						(38)						(1,034)
Charge-offs, valuation and other adjustments						(889)						(890)						(970)						(568)						(764)
Total reductions						(1,131)						(1,835)						(2,234)						(2,204)						(2,731)
Balance at end of quarter						$	5,251					$	4,220					$	4,983					$	5,336					$	5,881
[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																														Year Ended
						Dec 31,						Sep 30,						Jun 30,						Mar 31,						Dec 31,						December 31,
(Dollars in thousands)						2022						2022						2022						2022						2021						2022						2021
Allowance for credit losses ("ACL"):
ACL at beginning of period						$	64,382					$	65,211					$	64,754					$	68,097					$	74,587					$	68,097					$	83,269
Provision (credit) for credit losses on loans [1]						1,032						731						1,456						(2,931)						(7,417)						288						(14,323)
Charge-offs:
Commercial, financial and agricultural - Other						678						550						487						254						379						1,969						1,723
Consumer						1,881						1,912						1,390						1,216						952						6,399						4,402
Total charge-offs						2,559						2,462						1,877						1,470						1,331						8,368						6,125
Recoveries:
Commercial, financial and agricultural - Other						210						220						215						350						358						995						1,004
Real estate:
Construction						—						14						62						—						1,159						76						1,159
Residential mortgage						133						14						36						112						13						295						358
Home equity						—						36						—						—						—						36						9
Commercial mortgage						—						—						—						—						—						—						73
Consumer						540						618						565						596						728						2,319						2,673
Total recoveries						883						902						878						1,058						2,258						3,721						5,276
Net charge-offs (recoveries)						1,676						1,560						999						412						(927)						4,647						849
ACL at end of period						$	63,738					$	64,382					$	65,211					$	64,754					$	68,097					$	63,738					$	68,097
Average loans, net of deferred fees and costs						$	5,498,800					$	5,355,088					$	5,221,300					$	5,114,260					$	5,073,069					$	5,298,573					$	5,071,516
Annualized ratio of net charge-offs to average loans						0.12		%				0.12		%				0.08		%				0.03		%				(0.07)		%				0.09		%				0.02		%
[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.

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)			TABLE 10

The following table sets forth a reconciliation of net interest income and net interest margin ("NIM"), excluding the impact of SBA Paycheck Protection Program ("PPP") loans and its related net interest income and fees, for each of the periods indicated:

						Three Months Ended																														Year Ended
						Dec 31,						Sep 30,						Jun 30,						Mar 31,						Dec 31,						December 31,
						2022						2022						2022						2022						2021						2022						2021
Net interest income, reported						$	56,285					$	55,365					$	52,978					$	50,935					$	53,096					$	215,563					$	211,047
Less: Net interest income on PPP loans						(140)						(667)						(890)						(1,941)						(4,685)						(3,638)						(26,352)
Net income income, excl. PPP loans						$	56,145					$	54,698					$	52,088					$	48,994					$	48,411					$	211,925					$	184,695
Average interest-earning assets, reported						$	7,103,841					$	6,991,773					$	6,982,556					$	6,932,649					$	6,890,829					$	7,003,232					$	6,643,193
Less: Average PPP loans						(3,615)						(12,406)						(33,022)						(68,657)						(153,792)						(29,200)						(389,795)
Average interest-earning assets, excl. PPP						$	7,100,226					$	6,979,367					$	6,949,534					$	6,863,992					$	6,737,037					$	6,974,032					$	6,253,398
Net interest margin, reported						3.17		%				3.17		%				3.05		%				2.97		%				3.08		%				3.09		%				3.18		%
Less: Impact of PPP loans on net interest margin						(0.01)		%				(0.04)		%				(0.04)		%				(0.08)		%				(0.21)		%				(0.04)		%				(0.22)		%
Net interest margin, excl. PPP						3.16		%				3.13		%				3.01		%				2.89		%				2.87		%				3.05		%				2.96		%

The following table sets for a reconciliation of pre-tax pre-provision ("PTPP") earnings, excluding net interest income and fees on PPP loans, for each of the periods indicated:

						Three Months Ended																														Year Ended
						Dec 31,						Sep 30,						Jun 30,						Mar 31,						Dec 31,						December 31,
(Dollars in thousands)						2022						2022						2022						2022						2021						2022						2021
Net income						$	20,181					$	16,715					$	17,594					$	19,438					$	22,327					$	73,928					$	79,894
Add: Income tax expense						6,700						5,919						6,184						6,038						7,605						24,841						25,758
Income before taxes						26,881						22,634						23,778						25,476						29,932						98,769						105,652
Add: (Credit) provision for credit losses						571						362						989						(3,195)						(7,692)						(1,273)						(14,591)
PTPP earnings						27,452						22,996						24,767						22,281						22,240						97,496						91,061
Less: Net interest income on PPP loans						(140)						(667)						(890)						(1,941)						(4,685)						(3,638)						(26,352)
PTPP earnings, excluding net interest income on PPP loans						$	27,312					$	22,329					$	23,877					$	20,340					$	17,555					$	93,858					$	64,709