EX-99.1 2 exhibit99-1erq42023.htm EX-99.1
Exhibit 99.1

|  |  | FOR IMMEDIATE RELEASE
Investor Contact: | Ian Tanaka | Media Contact: | Tim Sakahara
| SVP, Treasury Manager |  | 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 $14.9 MILLION
AND FULL YEAR 2023 EARNINGS OF $58.7 MILLION
Highlights Included:
•Net income of $14.9 million, or $0.55 per diluted share for the fourth quarter.
•ROA of 0.79%, ROE of 12.55% and NIM of 2.84% for the fourth quarter.
•Net income of $58.7 million, or $2.17 per diluted share for the 2023 year.
•ROA of 0.78%, ROE of 12.38% and NIM of 2.94% for the 2023 year.
•Completed balance sheet repositioning including the sale of an office real estate property, branch lease termination and investment securities portfolio restructuring, resulting in a net $0.9 million pre-tax gain in the fourth quarter, and a total estimated annual positive impact to future pre-tax income of $2.0 million.
•Board of Directors approved quarterly cash dividend of $0.26 per share and authorized a new share repurchase program of up to $20.0 million for 2024.
HONOLULU, HI, January 31, 2024 – Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $14.9 million, or fully diluted earnings per share ("EPS") of $0.55 for the fourth quarter of 2023, compared to net income of $13.1 million, or EPS of $0.49 in the previous quarter and net income of $20.2 million, or EPS of $0.74 in the year-ago quarter. For the 2023 year, net income was $58.7 million, or EPS of $2.17, compared to net income of $73.9 million, or EPS of $2.68 last year.
Pre-provision net revenue ("PPNR"), or net income excluding provision for credit losses and income taxes, totaled $23.8 million in the fourth quarter of 2023, compared to PPNR of $22.4 million in the previous quarter and $27.5 million in the year-ago quarter.
"Our solid 2023 results reflect our consistent business approach, strong credit culture and commitment to the Hawaii marketplace. We are proud to have been named to Newsweek’s 2024 list of America’s Best Regional Banks, based on our creditworthiness, profitability, net loan activity and public image. This achievement was made possible through our hardworking and committed team of employees and support of our customers and the community." said Arnold Martines, President and Chief Executive Officer. "We believe we are positioned to deliver a strong financial performance in 2024, highlighted by our strategic relationship focused approach and our solid liquidity, capital and asset quality."

Central Pacific Financial Reports Fourth Quarter Earnings of $14.9 Million and Full Year 2023 Earnings of $58.7 Million
Page 2
Earnings Highlights
Net interest income was $51.1 million for the fourth quarter of 2023, which decreased by $0.8 million, or 1.5% from the previous quarter, and decreased by $5.1 million, or 9.1% from the year-ago quarter. Net interest margin ("NIM") was 2.84% for the fourth quarter of 2023, which decreased by 4 basis points ("bps") from the previous quarter and decreased by 33 bps from the year-ago quarter. The sequential quarter decreases in net interest income and NIM was primarily due to increases in average balances and rates paid on interest-bearing deposits, which outpaced the increases in average yields earned on investment securities and loans and the increase in average interest-earning deposits at the Federal Reserve Bank.
During the quarter, the Company completed a $30.0 million investment portfolio restructuring designed to increase prospective earnings and net interest margin. The Company sold available-for-sale debt securities with a book value of $30.0 million, weighted average yield of 3.3%, weighted average duration of 3.4 years, and recognized a loss of $1.9 million. Proceeds from the sale were used to purchase $28.3 million in debt securities with a weighted average yield of 5.7% and a weighted average duration of 2.5 years. The Company estimates the earn-back period to be approximately 2.8 years.
The Company recorded a provision for credit losses of $4.7 million in the fourth quarter of 2023, compared to a provision of $4.9 million in the previous quarter and a provision of $0.6 million in the year-ago quarter. The provision in the fourth quarter consisted of a provision for credit losses on loans of $5.0 million, offset by a credit to the provision for credit losses on off-balance sheet exposures of $0.3 million.
Other operating income totaled $15.2 million for the fourth quarter of 2023, compared to $10.0 million in the previous quarter and $11.6 million in the year-ago quarter. The increase from the previous quarter was primarily due to a non-recurring pre-tax net gain on the sale of a real estate property (included in other) of $5.1 million, combined with higher income from bank-owned life insurance ("BOLI") of $1.6 million, partially offset by the aforementioned losses on sales of investment securities totaling $1.9 million recognized in the current quarter. The Company expects future annual savings from the sale and consolidation of the real estate office space of approximately $0.6 million. The higher BOLI income was primarily attributable to equity market volatility and was offset by higher deferred compensation expense in other operating expenses.
Other operating expense totaled $42.5 million for the fourth quarter of 2023, compared to $39.6 million in the previous quarter and $40.4 million in the year-ago quarter. The increase from the previous quarter was primarily due to a non-recurring branch lease termination expense (included in other) of $2.3 million, combined with higher salaries and employee benefits of $1.1 million, partially offset by lower computer software expense of $0.4 million. The Company expects future annual savings from the branch lease termination and consolidation of approximately $0.7 million.
The efficiency ratio was 64.12% for the fourth quarter of 2023, compared to 63.91% in the previous quarter and 59.56% in the year-ago quarter.
The effective tax rate was 22.3% for the fourth quarter of 2023, compared to 24.9% in the previous quarter and 24.9% in the year-ago quarter. The lower effective tax rate was primarily attributable to higher tax-exempt BOLI income as a percentage of pre-tax income.
Balance Sheet Highlights
Total assets of $7.64 billion at December 31, 2023 remained relatively flat from $7.64 billion at September 30, 2023, and increased by $210.0 million, or 2.8% from $7.43 billion at December 31, 2022. The Company had $522.4 million in cash on its balance sheet and $2.45 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities at December 31, 2023. Total available sources of liquidity as a percentage of uninsured and uncollateralized deposits was 125% at December 31, 2023.
Total loans, net of deferred fees and costs, of $5.44 billion at December 31, 2023 decreased by $69.7 million, or 1.3% from $5.51 billion at September 30, 2023, and decreased by $116.5 million, or 2.1% from $5.56 billion at December 31, 2022. Average yields earned on loans during the fourth quarter of 2023 was 4.55%, compared to 4.49% in the previous quarter and 4.10% in the year-ago quarter.
Total deposits of $6.85 billion at December 31, 2023 decreased by $27.2 million or 0.4% from $6.87 billion at September 30, 2023, and increased by $111.4 million, or 1.7% from $6.74 billion at December 31, 2022. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.99 billion at December 31, 2023, and remained relatively flat from $5.99 billion at September 30, 2023. Average rates paid on total deposits during the fourth quarter of 2023 was

Central Pacific Financial Reports Fourth Quarter Earnings of $14.9 Million and Full Year 2023 Earnings of $58.7 Million
Page 3
1.22%, compared to 1.07% in the previous quarter and 0.41% in the year-ago quarter. At December 31, 2023, approximately 65% of the Company's total deposits were FDIC-insured or fully collateralized.
Asset Quality
Nonperforming assets totaled $7.0 million, or 0.09% of total assets at December 31, 2023, compared to $6.7 million, or 0.09% of total assets at September 30, 2023 and $5.3 million, or 0.07% of total assets at December 31, 2022.
Net charge-offs totaled $5.5 million in the fourth quarter of 2023, compared to net charge-offs of $3.9 million in the previous quarter, and net charge-offs of $1.7 million in the year-ago quarter. The increase in net charge-offs was primarily attributable to the mainland consumer loan portfolio. Annualized net charge-offs as a percentage of average loans was 0.41%, 0.28% and 0.12% during the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively.
The allowance for credit losses, as a percentage of total loans was 1.18% at December 31, 2023, compared to 1.17% at September 30, 2023, and 1.15% at December 31, 2022.
Capital
Total shareholders' equity was $503.8 million at December 31, 2023, compared to $468.6 million and $452.9 million at September 30, 2023 and December 31, 2022, respectively. The increase from the previous and year-ago quarters is primarily due to net income, combined with the decrease in unrealized losses on investment securities, partially offset by dividends paid.
The Company's leverage, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 capital ratios were 8.8%, 12.4%, 14.6%, and 11.4%, respectively, at December 31, 2023, compared to 8.7%, 11.9%, 14.1%, and 11.0%, respectively, at September 30, 2023.
On January 30, 2024, 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, 2024 to shareholders of record at the close of business on February 29, 2024.
On January 30, 2024, the Company's Board of Directors also authorized the repurchase of up to $20 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. The Company did not repurchase any shares of common stock during the fourth quarter of 2023. During the year ended December 31, 2023, the Company repurchased 130,010 shares of common stock, at a total cost of $2.6 million, or an average cost per share of $20.24. During the year ended December 31, 2023, the Company returned $30.7 million in capital to its shareholders through cash dividends and share repurchases.
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 1-888-510-2553 (access code: 9816541). A playback of the call will be available through March 1, 2024 by dialing 1-800-770-2030 (access code: 9816541) 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 $7.64 billion in assets as of December 31, 2023. Central Pacific Bank, its primary subsidiary, operates 27 branches and 58 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 Fourth Quarter Earnings of $14.9 Million and Full Year 2023 Earnings of $58.7 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. (the "Company") or its management or Board of Directors, including those relating to business plans, use of capital resources, products or services and regulatory developments and regulatory actions; statements of future economic performance including anticipated performance results from our business initiatives; or any statements of the assumptions underlying or relating to any of the foregoing. Words such as "believe," "plan," "anticipate," "expect," "intend," "forecast," "hope," "target," "continue," "remain," "estimate," "will," "should," "may" and other similar expressions are intended to identify FLS but are not the exclusive means of identifying such statements.
While we believe that our FLS and the assumptions underlying them are reasonably based, such statements and assumptions are by their nature subject to risks and uncertainties, 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 interest rate fluctuations; the adverse effects of recent bank failures and the potential impact of such developments on customer confidence, deposit behavior, liquidity and regulatory responses thereto; 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; supply chain disruptions; 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 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 and lawsuits we are or may become subject to, or regulatory or other governmental inquiries and proceedings and the resolution thereof, the results of regulatory examinations or reviews and the effect of, and our ability to comply with, any regulations or regulatory orders or actions we are or may become subject to; 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 impact resulting from the elimination of the London Interbank Offered Rate ("LIBOR") Index; 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; cybersecurity and data privacy breaches and the consequence therefrom; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; 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 Forms 10-Q and 10-K for the current and 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) |  | 2023 |  | 2023 |  | 2023 |  | 2023 |  | 2022 |  | 2023 |  | 2022
CONDENSED INCOME STATEMENT |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 51,142 |  |  | $ | 51,928 |  |  | $ | 52,734 |  |  | $ | 54,196 |  |  | $ | 56,285 |  |  | $ | 210,000 |  |  | $ | 215,563 |
Provision (credit) for credit losses |  | 4,653 |  |  | 4,874 |  |  | 4,319 |  |  | 1,852 |  |  | 571 |  |  | 15,698 |  |  | (1,273) |
Total other operating income |  | 15,172 |  |  | 10,047 |  |  | 10,435 |  |  | 11,009 |  |  | 11,601 |  |  | 46,663 |  |  | 47,919 |
Total other operating expense |  | 42,522 |  |  | 39,611 |  |  | 39,903 |  |  | 42,107 |  |  | 40,434 |  |  | 164,143 |  |  | 165,986 |
Income tax expense |  | 4,273 |  |  | 4,349 |  |  | 4,472 |  |  | 5,059 |  |  | 6,700 |  |  | 18,153 |  |  | 24,841 |
Net income |  | 14,866 |  |  | 13,141 |  |  | 14,475 |  |  | 16,187 |  |  | 20,181 |  |  | 58,669 |  |  | 73,928 |
Basic earnings per share |  | $ | 0.55 |  |  | $ | 0.49 |  |  | $ | 0.54 |  |  | $ | 0.60 |  |  | $ | 0.74 |  |  | $ | 2.17 |  |  | $ | 2.70 |
Diluted earnings per share |  | 0.55 |  |  | 0.49 |  |  | 0.53 |  |  | 0.60 |  |  | 0.74 |  |  | 2.17 |  |  | 2.68 |
Dividends declared per share |  | 0.26 |  |  | 0.26 |  |  | 0.26 |  |  | 0.26 |  |  | 0.26 |  |  | 1.04 |  |  | 1.04 |
PERFORMANCE RATIOS |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets (ROA) [1] |  | 0.79 | % |  | 0.70 | % |  | 0.78 | % |  | 0.87 | % |  | 1.09 | % |  | 0.78 | % |  | 1.01 | %
Return on average shareholders’ equity (ROE) [1] |  | 12.55 |  |  | 10.95 |  |  | 12.12 |  |  | 13.97 |  |  | 18.30 |  |  | 12.38 |  |  | 15.47 |
Average shareholders’ equity to average assets |  | 6.32 |  |  | 6.39 |  |  | 6.40 |  |  | 6.23 |  |  | 5.97 |  |  | 6.34 |  |  | 6.51 |
Efficiency ratio [2] |  | 64.12 |  |  | 63.91 |  |  | 63.17 |  |  | 64.58 |  |  | 59.56 |  |  | 63.95 |  |  | 63.00 |
Net interest margin (NIM) [1] |  | 2.84 |  |  | 2.88 |  |  | 2.96 |  |  | 3.08 |  |  | 3.17 |  |  | 2.94 |  |  | 3.09 |
Dividend payout ratio [3] |  | 47.27 |  |  | 53.06 |  |  | 49.06 |  |  | 43.33 |  |  | 35.14 |  |  | 47.93 |  |  | 38.81 |
SELECTED AVERAGE BALANCES |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average loans, including loans held for sale |  | $ | 5,458,245 |  |  | $ | 5,507,248 |  |  | $ | 5,543,398 |  |  | $ | 5,525,988 |  |  | $ | 5,498,800 |  |  | $ | 5,508,530 |  |  | $ | 5,298,573 |
Average interest-earning assets |  | 7,208,613 |  |  | 7,199,866 |  |  | 7,155,606 |  |  | 7,112,377 |  |  | 7,103,841 |  |  | 7,169,463 |  |  | 7,003,232 |
Average assets |  | 7,498,097 |  |  | 7,510,537 |  |  | 7,463,629 |  |  | 7,443,767 |  |  | 7,389,712 |  |  | 7,479,243 |  |  | 7,340,261 |
Average deposits |  | 6,730,883 |  |  | 6,738,071 |  |  | 6,674,650 |  |  | 6,655,660 |  |  | 6,673,922 |  |  | 6,700,127 |  |  | 6,604,049 |
Average interest-bearing liabilities |  | 5,023,321 |  |  | 4,999,820 |  |  | 4,908,120 |  |  | 4,820,660 |  |  | 4,708,045 |  |  | 4,938,705 |  |  | 4,530,347 |
Average shareholders’ equity |  | 473,708 |  |  | 480,118 |  |  | 477,711 |  |  | 463,556 |  |  | 441,084 |  |  | 473,819 |  |  | 477,775 |
[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 other 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,
|  | 2023 |  | 2023 |  | 2023 |  | 2023 |  | 2022
REGULATORY CAPITAL RATIOS |  |  |  |  |  |  |  |  |  |
Central Pacific Financial Corp. |  |  |  |  |  |  |  |  |  |
Leverage ratio |  | 8.8 | % |  | 8.7 | % |  | 8.7 | % |  | 8.6 | % |  | 8.5 | %
Tier 1 risk-based capital ratio |  | 12.4 |  |  | 11.9 |  |  | 11.8 |  |  | 11.5 |  |  | 11.3 |
Total risk-based capital ratio |  | 14.6 |  |  | 14.1 |  |  | 13.9 |  |  | 13.6 |  |  | 13.5 |
Common equity tier 1 capital ratio |  | 11.4 |  |  | 11.0 |  |  | 10.9 |  |  | 10.6 |  |  | 10.5 |
Central Pacific Bank |  |  |  |  |  |  |  |  |  |
Leverage ratio |  | 9.2 |  |  | 9.1 |  |  | 9.1 |  |  | 9.0 |  |  | 9.0 |
Tier 1 risk-based capital ratio |  | 12.9 |  |  | 12.4 |  |  | 12.3 |  |  | 12.0 |  |  | 11.9 |
Total risk-based capital ratio |  | 14.1 |  |  | 13.7 |  |  | 13.5 |  |  | 13.2 |  |  | 13.1 |
Common equity tier 1 capital ratio |  | 12.9 |  |  | 12.4 |  |  | 12.3 |  |  | 12.0 |  |  | 11.9 |

|  | Dec 31, |  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31,
(dollars in thousands, except for per share amounts) |  | 2023 |  | 2023 |  | 2023 |  | 2023 |  | 2022
BALANCE SHEET |  |  |  |  |  |  |  |  |  |
Total loans, net of deferred fees and costs |  | $ | 5,438,982 |  |  | $ | 5,508,710 |  |  | $ | 5,520,683 |  |  | $ | 5,557,397 |  |  | $ | 5,555,466 |
Total assets |  | 7,642,796 |  |  | 7,637,924 |  |  | 7,567,592 |  |  | 7,521,247 |  |  | 7,432,763 |
Total deposits |  | 6,847,592 |  |  | 6,874,745 |  |  | 6,805,737 |  |  | 6,746,968 |  |  | 6,736,223 |
Long-term debt |  | 156,102 |  |  | 156,041 |  |  | 155,981 |  |  | 155,920 |  |  | 105,859 |
Total shareholders’ equity |  | 503,815 |  |  | 468,598 |  |  | 476,279 |  |  | 470,926 |  |  | 452,871 |
Total shareholders’ equity to total assets |  | 6.59 | % |  | 6.14 | % |  | 6.29 | % |  | 6.26 | % |  | 6.09 | %
ASSET QUALITY |  |  |  |  |  |  |  |  |  |
Allowance for credit losses ("ACL") |  | $ | 63,934 |  |  | $ | 64,517 |  |  | $ | 63,849 |  |  | $ | 63,099 |  |  | $ | 63,738 |
Nonaccrual loans |  | 7,008 |  |  | 6,652 |  |  | 11,061 |  |  | 5,313 |  |  | 5,251 |
Non-performing assets ("NPA") |  | 7,008 |  |  | 6,652 |  |  | 11,061 |  |  | 5,313 |  |  | 5,251 |
Ratio of ACL to total loans |  | 1.18 | % |  | 1.17 | % |  | 1.16 | % |  | 1.14 | % |  | 1.15 | %
Ratio of NPA to total assets |  | 0.09 | % |  | 0.09 | % |  | 0.15 | % |  | 0.07 | % |  | 0.07 | %
PER SHARE OF COMMON STOCK OUTSTANDING |  |  |  |  |  |  |  |  |  |
Book value per common share |  | $ | 18.63 |  |  | $ | 17.33 |  |  | $ | 17.61 |  |  | $ | 17.44 |  |  | $ | 16.76 |
Closing market price per common share |  | 19.68 |  |  | 16.68 |  |  | 15.71 |  |  | 17.90 |  |  | 20.28 |

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) |  | 2023 |  | 2023 |  | 2023 |  | 2023 |  | 2022
ASSETS |  |  |  |  |  |  |  |  |  |
Cash and due from financial institutions |  | $ | 116,181 |  |  | $ | 108,818 |  |  | $ | 129,071 |  |  | $ | 108,535 |  |  | $ | 97,150 |
Interest-bearing deposits in other financial institutions |  | 406,256 |  |  | 329,913 |  |  | 181,913 |  |  | 90,247 |  |  | 14,894 |
Investment securities: |  |  |  |  |  |  |  |  |  |
Available-for-sale debt securities, at fair value |  | 647,210 |  |  | 625,253 |  |  | 664,071 |  |  | 687,188 |  |  | 671,794 |
Held-to-maturity debt securities, at amortized cost; fair value of: $565,178 at December 31, 2023, $531,887 at September 30, 2023, $581,222 at June 30, 2023, $599,300 at March 31, 2023, and $596,780 at December 31, 2022 |  | 632,338 |  |  | 640,053 |  |  | 649,946 |  |  | 658,596 |  |  | 664,883 |
Total investment securities |  | 1,279,548 |  |  | 1,265,306 |  |  | 1,314,017 |  |  | 1,345,784 |  |  | 1,336,677 |
Loans held for sale, at fair value |  | 1,778 |  |  | — |  |  | 2,593 |  |  | — |  |  | 1,105 |
Loans, net of deferred fees and costs |  | 5,438,982 |  |  | 5,508,710 |  |  | 5,520,683 |  |  | 5,557,397 |  |  | 5,555,466 |
Less: allowance for credit losses |  | 63,934 |  |  | 64,517 |  |  | 63,849 |  |  | 63,099 |  |  | 63,738 |
Loans, net of allowance for credit losses |  | 5,375,048 |  |  | 5,444,193 |  |  | 5,456,834 |  |  | 5,494,298 |  |  | 5,491,728 |
Premises and equipment, net |  | 96,184 |  |  | 97,378 |  |  | 96,479 |  |  | 93,761 |  |  | 91,634 |
Accrued interest receivable |  | 21,511 |  |  | 21,529 |  |  | 20,463 |  |  | 20,473 |  |  | 20,345 |
Investment in unconsolidated entities |  | 41,546 |  |  | 42,523 |  |  | 45,218 |  |  | 45,953 |  |  | 46,641 |
Mortgage servicing rights |  | 8,696 |  |  | 8,797 |  |  | 8,843 |  |  | 8,943 |  |  | 9,074 |
Bank-owned life insurance |  | 170,706 |  |  | 168,543 |  |  | 168,136 |  |  | 168,244 |  |  | 167,967 |
Federal Home Loan Bank of Des Moines ("FHLB") stock |  | 6,793 |  |  | 10,995 |  |  | 10,960 |  |  | 11,960 |  |  | 9,146 |
Right-of-use lease assets |  | 29,720 |  |  | 32,294 |  |  | 33,247 |  |  | 34,237 |  |  | 34,985 |
Other assets |  | 88,829 |  |  | 107,635 |  |  | 99,818 |  |  | 98,812 |  |  | 111,417 |
Total assets |  | $ | 7,642,796 |  |  | $ | 7,637,924 |  |  | $ | 7,567,592 |  |  | $ | 7,521,247 |  |  | $ | 7,432,763 |
LIABILITIES |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |
Noninterest-bearing demand |  | $ | 1,913,379 |  |  | $ | 1,969,523 |  |  | $ | 2,009,387 |  |  | $ | 2,028,087 |  |  | $ | 2,092,823 |
Interest-bearing demand |  | 1,329,189 |  |  | 1,345,843 |  |  | 1,359,978 |  |  | 1,386,913 |  |  | 1,453,167 |
Savings and money market |  | 2,209,733 |  |  | 2,209,550 |  |  | 2,184,652 |  |  | 2,184,675 |  |  | 2,199,028 |
Time |  | 1,395,291 |  |  | 1,349,829 |  |  | 1,251,720 |  |  | 1,147,293 |  |  | 991,205 |
Total deposits |  | 6,847,592 |  |  | 6,874,745 |  |  | 6,805,737 |  |  | 6,746,968 |  |  | 6,736,223 |
FHLB advances and other short-term borrowings |  | — |  |  | — |  |  | — |  |  | 25,000 |  |  | 5,000 |
Long-term debt, net of unamortized debt issuance costs of: $445 at December 31, 2023, $506 at September 30, 2023, $566 at June 30, 2023, $627 at March 31, 2023 and $688 at December 31, 2022 |  | 156,102 |  |  | 156,041 |  |  | 155,981 |  |  | 155,920 |  |  | 105,859 |
Lease liabilities |  | 30,634 |  |  | 33,186 |  |  | 34,111 |  |  | 35,076 |  |  | 35,889 |
Other liabilities |  | 104,653 |  |  | 105,354 |  |  | 95,484 |  |  | 87,357 |  |  | 96,921 |
Total liabilities |  | 7,138,981 |  |  | 7,169,326 |  |  | 7,091,313 |  |  | 7,050,321 |  |  | 6,979,892 |
EQUITY |  |  |  |  |  |  |  |  |  |
Shareholders' equity: |  |  |  |  |  |  |  |  |  |
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,045,033 at December 31, 2023, 27,043,169 at September 30, 2023, 27,045,792 at June 30, 2023, 27,005,545 at March 31, 2023, and 27,025,070 at December 31, 2022 |  | 405,439 |  |  | 405,439 |  |  | 405,511 |  |  | 405,866 |  |  | 408,071 |
Additional paid-in capital |  | 102,982 |  |  | 102,550 |  |  | 101,997 |  |  | 101,188 |  |  | 101,346 |
Retained earnings |  | 117,990 |  |  | 110,156 |  |  | 104,046 |  |  | 96,600 |  |  | 87,438 |
Accumulated other comprehensive loss |  | (122,596) |  |  | (149,547) |  |  | (135,275) |  |  | (132,728) |  |  | (143,984) |
Total shareholders' equity |  | 503,815 |  |  | 468,598 |  |  | 476,279 |  |  | 470,926 |  |  | 452,871 |
Total liabilities and equity |  | $ | 7,642,796 |  |  | $ | 7,637,924 |  |  | $ | 7,567,592 |  |  | $ | 7,521,247 |  |  | $ | 7,432,763 |

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, |  | Dec 31,
(Dollars in thousands, except per share data) |  | 2023 |  | 2023 |  | 2023 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest and fees on loans |  | $ | 62,429 |  |  | $ | 62,162 |  |  | $ | 60,455 |  |  | $ | 58,269 |  |  | $ | 56,682 |  |  | $ | 243,315 |  |  | $ | 200,280 |
Interest and dividends on investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Taxable investment securities |  | 7,292 |  |  | 7,016 |  |  | 7,145 |  |  | 7,336 |  |  | 7,104 |  |  | 28,789 |  |  | 28,041 |
Tax-exempt investment securities |  | 686 |  |  | 709 |  |  | 727 |  |  | 790 |  |  | 776 |  |  | 2,912 |  |  | 3,204 |
Dividends on investment securities |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 21 |
Interest on deposits in other financial institutions |  | 3,597 |  |  | 2,412 |  |  | 877 |  |  | 277 |  |  | 370 |  |  | 7,163 |  |  | 740 |
Dividend income on FHLB stock |  | 109 |  |  | 113 |  |  | 120 |  |  | 136 |  |  | 105 |  |  | 478 |  |  | 370 |
Total interest income |  | 74,113 |  |  | 72,412 |  |  | 69,324 |  |  | 66,808 |  |  | 65,037 |  |  | 282,657 |  |  | 232,656 |
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest on deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand |  | 467 |  |  | 460 |  |  | 411 |  |  | 363 |  |  | 333 |  |  | 1,701 |  |  | 806 |
Savings and money market |  | 7,459 |  |  | 6,464 |  |  | 4,670 |  |  | 3,386 |  |  | 2,488 |  |  | 21,979 |  |  | 4,188 |
Time |  | 12,741 |  |  | 11,268 |  |  | 8,932 |  |  | 6,264 |  |  | 4,063 |  |  | 39,205 |  |  | 6,114 |
Interest on short-term borrowings |  | — |  |  | — |  |  | 378 |  |  | 761 |  |  | 393 |  |  | 1,139 |  |  | 1,055 |
Interest on long-term debt |  | 2,304 |  |  | 2,292 |  |  | 2,199 |  |  | 1,838 |  |  | 1,475 |  |  | 8,633 |  |  | 4,930 |
Total interest expense |  | 22,971 |  |  | 20,484 |  |  | 16,590 |  |  | 12,612 |  |  | 8,752 |  |  | 72,657 |  |  | 17,093 |
Net interest income |  | 51,142 |  |  | 51,928 |  |  | 52,734 |  |  | 54,196 |  |  | 56,285 |  |  | 210,000 |  |  | 215,563 |
Provision (credit) for credit losses |  | 4,653 |  |  | 4,874 |  |  | 4,319 |  |  | 1,852 |  |  | 571 |  |  | 15,698 |  |  | (1,273) |
Net interest income after provision (credit) for credit losses |  | 46,489 |  |  | 47,054 |  |  | 48,415 |  |  | 52,344 |  |  | 55,714 |  |  | 194,302 |  |  | 216,836 |
Other operating income: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage banking income |  | 611 |  |  | 765 |  |  | 690 |  |  | 526 |  |  | 667 |  |  | 2,592 |  |  | 3,810 |
Service charges on deposit accounts |  | 2,312 |  |  | 2,193 |  |  | 2,137 |  |  | 2,111 |  |  | 2,172 |  |  | 8,753 |  |  | 8,197 |
Other service charges and fees |  | 5,349 |  |  | 5,203 |  |  | 4,994 |  |  | 4,985 |  |  | 4,972 |  |  | 20,531 |  |  | 19,025 |
Income from fiduciary activities |  | 1,272 |  |  | 1,234 |  |  | 1,068 |  |  | 1,321 |  |  | 1,058 |  |  | 4,895 |  |  | 4,565 |
Net (loss) gain on sales of investment securities |  | (1,939) |  |  | (135) |  |  | — |  |  | — |  |  | — |  |  | (2,074) |  |  | 8,506 |
Income from bank-owned life insurance |  | 2,015 |  |  | 379 |  |  | 1,185 |  |  | 1,291 |  |  | 2,187 |  |  | 4,870 |  |  | 1,865 |
Other |  | 5,552 |  |  | 408 |  |  | 361 |  |  | 775 |  |  | 545 |  |  | 7,096 |  |  | 1,951 |
Total other operating income |  | 15,172 |  |  | 10,047 |  |  | 10,435 |  |  | 11,009 |  |  | 11,601 |  |  | 46,663 |  |  | 47,919 |
Other operating expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  | 20,164 |  |  | 19,015 |  |  | 20,848 |  |  | 22,023 |  |  | 22,692 |  |  | 82,050 |  |  | 88,781 |
Net occupancy |  | 4,676 |  |  | 4,725 |  |  | 4,310 |  |  | 4,474 |  |  | 3,998 |  |  | 18,185 |  |  | 16,963 |
Equipment |  | 968 |  |  | 1,112 |  |  | 932 |  |  | 946 |  |  | 996 |  |  | 3,958 |  |  | 4,238 |
Communication |  | 632 |  |  | 809 |  |  | 791 |  |  | 778 |  |  | 696 |  |  | 3,010 |  |  | 2,958 |
Legal and professional services |  | 2,245 |  |  | 2,359 |  |  | 2,469 |  |  | 2,886 |  |  | 2,677 |  |  | 9,959 |  |  | 10,792 |
Computer software |  | 4,026 |  |  | 4,473 |  |  | 4,621 |  |  | 4,606 |  |  | 3,996 |  |  | 17,726 |  |  | 14,840 |
Advertising |  | 1,045 |  |  | 968 |  |  | 942 |  |  | 933 |  |  | 701 |  |  | 3,888 |  |  | 4,151 |
Other |  | 8,766 |  |  | 6,150 |  |  | 4,990 |  |  | 5,461 |  |  | 4,678 |  |  | 25,367 |  |  | 23,263 |
Total other operating expense |  | 42,522 |  |  | 39,611 |  |  | 39,903 |  |  | 42,107 |  |  | 40,434 |  |  | 164,143 |  |  | 165,986 |
Income before income taxes |  | 19,139 |  |  | 17,490 |  |  | 18,947 |  |  | 21,246 |  |  | 26,881 |  |  | 76,822 |  |  | 98,769 |
Income tax expense |  | 4,273 |  |  | 4,349 |  |  | 4,472 |  |  | 5,059 |  |  | 6,700 |  |  | 18,153 |  |  | 24,841 |
Net income |  | $ | 14,866 |  |  | $ | 13,141 |  |  | $ | 14,475 |  |  | $ | 16,187 |  |  | $ | 20,181 |  |  | $ | 58,669 |  |  | $ | 73,928 |
Per common share data: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings per share |  | $ | 0.55 |  |  | $ | 0.49 |  |  | $ | 0.54 |  |  | $ | 0.60 |  |  | $ | 0.74 |  |  | $ | 2.17 |  |  | $ | 2.70 |
Diluted earnings per share |  | 0.55 |  |  | 0.49 |  |  | 0.53 |  |  | 0.60 |  |  | 0.74 |  |  | 2.17 |  |  | 2.68 |
Cash dividends declared |  | 0.26 |  |  | 0.26 |  |  | 0.26 |  |  | 0.26 |  |  | 0.26 |  |  | 1.04 |  |  | 1.04 |
Basic weighted average shares outstanding |  | 27,044,121 |  |  | 27,042,762 |  |  | 27,024,043 |  |  | 26,999,138 |  |  | 27,134,970 |  |  | 27,027,681 |  |  | 27,398,445 |
Diluted weighted average shares outstanding |  | 27,097,285 |  |  | 27,079,484 |  |  | 27,071,478 |  |  | 27,122,012 |  |  | 27,303,249 |  |  | 27,080,518 |  |  | 27,567,780 |

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, 2023 |  | September 30, 2023 |  | December 31, 2022
|  | 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 |  | $ | 261,594 |  |  | 5.45 | % |  | $ | 3,597 |  |  | $ | 177,780 |  |  | 5.38 | % |  | $ | 2,412 |  |  | $ | 38,610 |  |  | 3.80 | % |  | $ | 370 |
Investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Taxable |  | 1,331,752 |  |  | 2.19 |  |  | 7,292 |  |  | 1,354,039 |  |  | 2.07 |  |  | 7,016 |  |  | 1,399,627 |  |  | 2.03 |  |  | 7,104 |
Tax-exempt [1] |  | 146,803 |  |  | 2.36 |  |  | 868 |  |  | 149,824 |  |  | 2.40 |  |  | 897 |  |  | 156,079 |  |  | 2.52 |  |  | 982 |
Total investment securities |  | 1,478,555 |  |  | 2.21 |  |  | 8,160 |  |  | 1,503,863 |  |  | 2.10 |  |  | 7,913 |  |  | 1,555,706 |  |  | 2.08 |  |  | 8,086 |
Loans, including loans held for sale |  | 5,458,245 |  |  | 4.55 |  |  | 62,429 |  |  | 5,507,248 |  |  | 4.49 |  |  | 62,162 |  |  | 5,498,800 |  |  | 4.10 |  |  | 56,682 |
FHLB stock |  | 10,219 |  |  | 4.30 |  |  | 109 |  |  | 10,975 |  |  | 4.09 |  |  | 113 |  |  | 10,725 |  |  | 3.90 |  |  | 105 |
Total interest-earning assets |  | 7,208,613 |  |  | 4.10 |  |  | 74,295 |  |  | 7,199,866 |  |  | 4.01 |  |  | 72,600 |  |  | 7,103,841 |  |  | 3.66 |  |  | 65,243 |
Noninterest-earning assets |  | 289,484 |  |  |  |  |  |  | 310,671 |  |  |  |  |  |  | 285,871 |  |  |  |  |
Total assets |  | $ | 7,498,097 |  |  |  |  |  |  | $ | 7,510,537 |  |  |  |  |  |  | $ | 7,389,712 |  |  |  |  |
LIABILITIES AND EQUITY
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing demand deposits |  | $ | 1,315,943 |  |  | 0.14 | % |  | $ | 467 |  |  | $ | 1,339,294 |  |  | 0.14 | % |  | $ | 460 |  |  | $ | 1,441,787 |  |  | 0.09 | % |  | $ | 333 |
Savings and money market deposits |  | 2,217,065 |  |  | 1.33 |  |  | 7,459 |  |  | 2,209,835 |  |  | 1.16 |  |  | 6,464 |  |  | 2,209,166 |  |  | 0.45 |  |  | 2,488 |
Time deposits up to $250,000 |  | 478,085 |  |  | 2.80 |  |  | 3,373 |  |  | 449,844 |  |  | 2.33 |  |  | 2,637 |  |  | 311,639 |  |  | 1.50 |  |  | 1,174 |
Time deposits over $250,000 |  | 856,159 |  |  | 4.34 |  |  | 9,368 |  |  | 844,842 |  |  | 4.05 |  |  | 8,631 |  |  | 595,133 |  |  | 1.93 |  |  | 2,889 |
Total interest-bearing deposits |  | 4,867,252 |  |  | 1.68 |  |  | 20,667 |  |  | 4,843,815 |  |  | 1.49 |  |  | 18,192 |  |  | 4,557,725 |  |  | 0.60 |  |  | 6,884 |
FHLB advances and other short-term borrowings |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 44,491 |  |  | 3.51 |  |  | 393 |
Long-term debt |  | 156,069 |  |  | 5.86 |  |  | 2,304 |  |  | 156,005 |  |  | 5.83 |  |  | 2,292 |  |  | 105,829 |  |  | 5.53 |  |  | 1,475 |
Total interest-bearing liabilities |  | 5,023,321 |  |  | 1.81 |  |  | 22,971 |  |  | 4,999,820 |  |  | 1.63 |  |  | 20,484 |  |  | 4,708,045 |  |  | 0.74 |  |  | 8,752 |
Noninterest-bearing deposits |  | 1,863,631 |  |  |  |  |  |  | 1,894,256 |  |  |  |  |  |  | 2,116,197 |  |  |  |  |
Other liabilities |  | 137,437 |  |  |  |  |  |  | 136,343 |  |  |  |  |  |  | 124,386 |  |  |  |  |
Total liabilities |  | 7,024,389 |  |  |  |  |  |  | 7,030,419 |  |  |  |  |  |  | 6,948,628 |  |  |  |  |
Total equity |  | 473,708 |  |  |  |  |  |  | 480,118 |  |  |  |  |  |  | 441,084 |  |  |  |  |
Total liabilities and equity |  | $ | 7,498,097 |  |  |  |  |  |  | $ | 7,510,537 |  |  |  |  |  |  | $ | 7,389,712 |  |  |  |  |
Net interest income |  |  |  |  |  | $ | 51,324 |  |  |  |  |  |  | $ | 52,116 |  |  |  |  |  |  | $ | 56,491 |
Interest rate spread |  |  |  | 2.29 | % |  |  |  |  |  | 2.38 | % |  |  |  |  |  | 2.92 | % |  |
Net interest margin |  |  |  | 2.84 | % |  |  |  |  |  | 2.88 | % |  |  |  |  |  | 3.17 | % |  |
[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%.
Note: Certain prior period information has been reclassified to conform to the current period presentation.

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, 2023 |  | December 31, 2022
|  | 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 |  | $ | 134,150 |  |  | 5.34 | % |  | $ | 7,163 |  |  | $ | 80,096 |  |  | 0.92 | % |  | $ | 740 |
Investment securities: |  |  |  |  |  |  |  |  |  |  |  |
Taxable |  | 1,365,067 |  |  | 2.11 |  |  | 28,789 |  |  | 1,455,246 |  |  | 1.93 |  |  | 28,062 |
Tax-exempt [1] |  | 150,399 |  |  | 2.45 |  |  | 3,686 |  |  | 159,120 |  |  | 2.55 |  |  | 4,056 |
Total investment securities |  | 1,515,466 |  |  | 2.14 |  |  | 32,475 |  |  | 1,614,366 |  |  | 1.99 |  |  | 32,118 |
Loans, including loans held for sale |  | 5,508,530 |  |  | 4.42 |  |  | 243,315 |  |  | 5,298,573 |  |  | 3.78 |  |  | 200,280 |
FHLB stock |  | 11,317 |  |  | 4.23 |  |  | 478 |  |  | 10,197 |  |  | 3.63 |  |  | 370 |
Total interest-earning assets |  | 7,169,463 |  |  | 3.95 |  |  | 283,431 |  |  | 7,003,232 |  |  | 3.33 |  |  | 233,508 |
Noninterest-earning assets |  | 309,780 |  |  |  |  |  |  | 337,029 |  |  |  |  |
Total assets |  | $ | 7,479,243 |  |  |  |  |  |  | $ | 7,340,261 |  |  |  |  |
LIABILITIES AND EQUITY
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing demand deposits |  | $ | 1,359,240 |  |  | 0.13 | % |  | $ | 1,701 |  |  | $ | 1,438,232 |  |  | 0.06 | % |  | $ | 806 |
Savings and money market deposits |  | 2,195,763 |  |  | 1.00 |  |  | 21,979 |  |  | 2,208,630 |  |  | 0.19 |  |  | 4,188 |
Time deposits up to $250,000 |  | 415,541 |  |  | 2.15 |  |  | 8,917 |  |  | 245,599 |  |  | 0.70 |  |  | 1,723 |
Time deposits over $250,000 |  | 795,917 |  |  | 3.81 |  |  | 30,288 |  |  | 494,943 |  |  | 0.89 |  |  | 4,391 |
Total interest-bearing deposits |  | 4,766,461 |  |  | 1.32 |  |  | 62,885 |  |  | 4,387,404 |  |  | 0.25 |  |  | 11,108 |
FHLB advances and other short-term borrowings |  | 23,322 |  |  | 4.88 |  |  | 1,139 |  |  | 37,211 |  |  | 2.84 |  |  | 1,055 |
Long-term debt |  | 148,922 |  |  | 5.80 |  |  | 8,633 |  |  | 105,732 |  |  | 4.66 |  |  | 4,930 |
Total interest-bearing liabilities |  | 4,938,705 |  |  | 1.47 |  |  | 72,657 |  |  | 4,530,347 |  |  | 0.38 |  |  | 17,093 |
Noninterest-bearing deposits |  | 1,933,666 |  |  |  |  |  |  | 2,216,645 |  |  |  |  |
Other liabilities |  | 133,053 |  |  |  |  |  |  | 115,478 |  |  |  |  |
Total liabilities |  | 7,005,424 |  |  |  |  |  |  | 6,862,470 |  |  |  |  |
Shareholders’ equity |  | 473,819 |  |  |  |  |  |  | 477,775 |  |  |  |  |
Non-controlling interest |  | — |  |  |  |  |  |  | 16 |  |  |  |  |
Total equity |  | 473,819 |  |  |  |  |  |  | 477,791 |  |  |  |  |
Total liabilities and equity |  | $ | 7,479,243 |  |  |  |  |  |  | $ | 7,340,261 |  |  |  |  |
Net interest income |  |  |  |  |  | $ | 210,774 |  |  |  |  |  |  | $ | 216,415 |
Interest rate spread |  |  |  | 2.48 | % |  |  |  |  |  | 2.95 | % |  |
Net interest margin |  |  |  | 2.94 | % |  |  |  |  |  | 3.09 | % |  |
[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%.
Note: Certain prior period information has been reclassified to conform to the current period presentation.

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) |  | 2023 |  | 2023 |  | 2023 |  | 2023 |  | 2022
HAWAII: |  |  |  |  |  |  |  |  |  |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |
Small Business Administration Paycheck Protection Program ("SBA PPP") |  | $ | 1,284 |  |  | $ | 1,410 |  |  | $ | 1,565 |  |  | $ | 1,821 |  |  | $ | 2,555 |
Other |  | 420,452 |  |  | 405,023 |  |  | 373,036 |  |  | 375,158 |  |  | 383,665 |
Real estate: |  |  |  |  |  |  |  |  |  |
Construction |  | 163,337 |  |  | 174,057 |  |  | 168,012 |  |  | 154,303 |  |  | 150,208 |
Residential mortgage |  | 1,927,789 |  |  | 1,930,740 |  |  | 1,942,906 |  |  | 1,941,230 |  |  | 1,940,999 |
Home equity |  | 736,524 |  |  | 753,980 |  |  | 750,760 |  |  | 743,908 |  |  | 739,380 |
Commercial mortgage |  | 1,063,969 |  |  | 1,045,625 |  |  | 1,037,826 |  |  | 1,030,086 |  |  | 1,029,708 |
Consumer |  | 322,346 |  |  | 338,248 |  |  | 327,790 |  |  | 342,922 |  |  | 346,789 |
Total loans, net of deferred fees and costs |  | 4,635,701 |  |  | 4,649,083 |  |  | 4,601,895 |  |  | 4,589,428 |  |  | 4,593,304 |
Less: Allowance for credit losses |  | 48,189 |  |  | 48,105 |  |  | 44,828 |  |  | 44,062 |  |  | 45,169 |
Loans, net of allowance for credit losses |  | $ | 4,587,512 |  |  | $ | 4,600,978 |  |  | $ | 4,557,067 |  |  | $ | 4,545,366 |  |  | $ | 4,548,135 |
U.S. MAINLAND: [1] |  |  |  |  |  |  |  |  |  |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |
Other |  | 153,971 |  |  | 157,373 |  |  | 170,557 |  |  | 179,906 |  |  | 160,282 |
Real estate: |  |  |  |  |  |  |  |  |  |
Construction |  | 22,182 |  |  | 37,455 |  |  | 32,807 |  |  | 27,171 |  |  | 16,515 |
Commercial mortgage |  | 318,933 |  |  | 319,802 |  |  | 329,736 |  |  | 331,546 |  |  | 333,367 |
Consumer |  | 308,195 |  |  | 344,997 |  |  | 385,688 |  |  | 429,346 |  |  | 451,998 |
Total loans, net of deferred fees and costs |  | 803,281 |  |  | 859,627 |  |  | 918,788 |  |  | 967,969 |  |  | 962,162 |
Less: Allowance for credit losses |  | 15,745 |  |  | 16,412 |  |  | 19,021 |  |  | 19,037 |  |  | 18,569 |
Loans, net of allowance for credit losses |  | $ | 787,536 |  |  | $ | 843,215 |  |  | $ | 899,767 |  |  | $ | 948,932 |  |  | $ | 943,593 |
TOTAL: |  |  |  |  |  |  |  |  |  |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |
SBA PPP |  | $ | 1,284 |  |  | $ | 1,410 |  |  | $ | 1,565 |  |  | $ | 1,821 |  |  | $ | 2,555 |
Other |  | 574,423 |  |  | 562,396 |  |  | 543,593 |  |  | 555,064 |  |  | 543,947 |
Real estate: |  |  |  |  |  |  |  |  |  |
Construction |  | 185,519 |  |  | 211,512 |  |  | 200,819 |  |  | 181,474 |  |  | 166,723 |
Residential mortgage |  | 1,927,789 |  |  | 1,930,740 |  |  | 1,942,906 |  |  | 1,941,230 |  |  | 1,940,999 |
Home equity |  | 736,524 |  |  | 753,980 |  |  | 750,760 |  |  | 743,908 |  |  | 739,380 |
Commercial mortgage |  | 1,382,902 |  |  | 1,365,427 |  |  | 1,367,562 |  |  | 1,361,632 |  |  | 1,363,075 |
Consumer |  | 630,541 |  |  | 683,245 |  |  | 713,478 |  |  | 772,268 |  |  | 798,787 |
Total loans, net of deferred fees and costs |  | 5,438,982 |  |  | 5,508,710 |  |  | 5,520,683 |  |  | 5,557,397 |  |  | 5,555,466 |
Less: Allowance for credit losses |  | 63,934 |  |  | 64,517 |  |  | 63,849 |  |  | 63,099 |  |  | 63,738 |
Loans, net of allowance for credit losses |  | $ | 5,375,048 |  |  | $ | 5,444,193 |  |  | $ | 5,456,834 |  |  | $ | 5,494,298 |  |  | $ | 5,491,728 |
[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) |  | 2023 |  | 2023 |  | 2023 |  | 2023 |  | 2022
Noninterest-bearing demand deposits |  | $ | 1,913,379 |  |  | $ | 1,969,523 |  |  | $ | 2,009,387 |  |  | $ | 2,028,087 |  |  | $ | 2,092,823 |
Interest-bearing demand deposits |  | 1,329,189 |  |  | 1,345,843 |  |  | 1,359,978 |  |  | 1,386,913 |  |  | 1,453,167 |
Savings and money market deposits |  | 2,209,733 |  |  | 2,209,550 |  |  | 2,184,652 |  |  | 2,184,675 |  |  | 2,199,028 |
Time deposits up to $250,000 |  | 533,898 |  |  | 465,543 |  |  | 427,864 |  |  | 372,150 |  |  | 330,148 |
Core deposits |  | 5,986,199 |  |  | 5,990,459 |  |  | 5,981,881 |  |  | 5,971,825 |  |  | 6,075,166 |
Government time deposits |  | 374,581 |  |  | 400,130 |  |  | 383,426 |  |  | 360,501 |  |  | 290,057 |
Other time deposits greater than $250,000 |  | 486,812 |  |  | 484,156 |  |  | 440,430 |  |  | 414,642 |  |  | 371,000 |
Total time deposits greater than $250,000 |  | 861,393 |  |  | 884,286 |  |  | 823,856 |  |  | 775,143 |  |  | 661,057 |
Total deposits |  | $ | 6,847,592 |  |  | $ | 6,874,745 |  |  | $ | 6,805,737 |  |  | $ | 6,746,968 |  |  | $ | 6,736,223 |

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES |
Nonperforming Assets and Accruing Loans 90+ Days Past Due |
(Unaudited) | TABLE 8

|  | Dec 31, |  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31,
(Dollars in thousands) |  | 2023 |  | 2023 |  | 2023 |  | 2023 |  | 2022
Nonaccrual loans: |  |  |  |  |  |  |  |  |  |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |
Other |  | $ | 432 |  |  | $ | 352 |  |  | $ | 319 |  |  | $ | 264 |  |  | $ | 297 |
Real estate: |  |  |  |  |  |  |  |  |  |
Construction |  | — |  |  | — |  |  | 4,851 |  |  | — |  |  | — |
Residential mortgage |  | 4,962 |  |  | 4,949 |  |  | 4,385 |  |  | 3,445 |  |  | 3,808 |
Home equity |  | 834 |  |  | 677 |  |  | 797 |  |  | 712 |  |  | 570 |
Commercial mortgage |  | 77 |  |  | 77 |  |  | 77 |  |  | 77 |  |  | — |
Consumer |  | 703 |  |  | 597 |  |  | 632 |  |  | 815 |  |  | 576 |
Total nonaccrual loans |  | 7,008 |  |  | 6,652 |  |  | 11,061 |  |  | 5,313 |  |  | 5,251 |
Foreclosed real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total nonperforming assets ("NPAs") |  | 7,008 |  |  | 6,652 |  |  | 11,061 |  |  | 5,313 |  |  | 5,251 |
Accruing loans 90+ days past due: |  |  |  |  |  |  |  |  |  |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |
SBA PPP |  | — |  |  | — |  |  | — |  |  | — |  |  | 13 |
Other |  | — |  |  | — |  |  | — |  |  | — |  |  | 26 |
Real estate: |  |  |  |  |  |  |  |  |  |
Residential mortgage |  | — |  |  | 794 |  |  | 959 |  |  | — |  |  | 559 |
Home equity |  | 229 |  |  | — |  |  | 133 |  |  | — |  |  | — |
Consumer |  | 1,083 |  |  | 2,120 |  |  | 2,207 |  |  | 1,908 |  |  | 1,240 |
Total accruing loans 90+ days past due |  | 1,312 |  |  | 2,914 |  |  | 3,299 |  |  | 1,908 |  |  | 1,838 |
Total NPAs and accruing loans 90+ days past due |  | $ | 8,320 |  |  | $ | 9,566 |  |  | $ | 14,360 |  |  | $ | 7,221 |  |  | $ | 7,089 |
Ratio of total nonaccrual loans to total loans |  | 0.13 | % |  | 0.12 | % |  | 0.20 | % |  | 0.10 | % |  | 0.09 | %
Ratio of total NPAs to total loans and foreclosed real estate |  | 0.13 | % |  | 0.12 | % |  | 0.20 | % |  | 0.10 | % |  | 0.09 | %
Ratio of total NPAs and accruing loans 90+ days past due to total loans and foreclosed real estate |  | 0.15 | % |  | 0.17 | % |  | 0.26 | % |  | 0.13 | % |  | 0.13 | %
Quarter-to-quarter changes in NPAs: |  |  |  |  |  |  |  |  |  |
Balance at beginning of quarter |  | $ | 6,652 |  |  | $ | 11,061 |  |  | $ | 5,313 |  |  | $ | 5,251 |  |  | $ | 4,220 |
Additions |  | 1,836 |  |  | 2,311 |  |  | 7,105 |  |  | 1,609 |  |  | 2,162 |
Reductions: |  |  |  |  |  |  |  |  |  |
Payments |  | (268) |  |  | (5,718) |  |  | (290) |  |  | (505) |  |  | (198) |
Return to accrual status |  | (137) |  |  | (207) |  |  | (212) |  |  | (14) |  |  | (44) |
Net charge-offs, valuation and other adjustments |  | (1,075) |  |  | (795) |  |  | (855) |  |  | (1,028) |  |  | (889) |
Total reductions |  | (1,480) |  |  | (6,720) |  |  | (1,357) |  |  | (1,547) |  |  | (1,131) |
Balance at end of quarter |  | $ | 7,008 |  |  | $ | 6,652 |  |  | $ | 11,061 |  |  | $ | 5,313 |  |  | $ | 5,251 |

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, |  | Dec 31,
(Dollars in thousands) |  | 2023 |  | 2023 |  | 2023 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period |  | $ | 64,517 |  |  | $ | 63,849 |  |  | $ | 63,099 |  |  | $ | 63,738 |  |  | $ | 64,382 |  |  | $ | 63,738 |  |  | $ | 68,097 |
Provision for credit losses on loans |  | 4,959 |  |  | 4,526 |  |  | 4,135 |  |  | 1,615 |  |  | 1,032 |  |  | 15,235 |  |  | 288 |
Charge-offs: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other |  | 419 |  |  | 402 |  |  | 362 |  |  | 779 |  |  | 678 |  |  | 1,962 |  |  | 1,969 |
Consumer |  | 5,976 |  |  | 4,710 |  |  | 3,873 |  |  | 2,686 |  |  | 1,881 |  |  | 17,245 |  |  | 6,399 |
Total charge-offs |  | 6,395 |  |  | 5,112 |  |  | 4,235 |  |  | 3,465 |  |  | 2,559 |  |  | 19,207 |  |  | 8,368 |
Recoveries: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other |  | 84 |  |  | 261 |  |  | 125 |  |  | 250 |  |  | 210 |  |  | 720 |  |  | 995 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 76 |
Residential mortgage |  | 7 |  |  | 10 |  |  | 7 |  |  | 53 |  |  | 133 |  |  | 77 |  |  | 295 |
Home equity |  | 42 |  |  | — |  |  | 15 |  |  | — |  |  | — |  |  | 57 |  |  | 36 |
Consumer |  | 720 |  |  | 982 |  |  | 703 |  |  | 908 |  |  | 540 |  |  | 3,313 |  |  | 2,319 |
Total recoveries |  | 853 |  |  | 1,254 |  |  | 850 |  |  | 1,211 |  |  | 883 |  |  | 4,168 |  |  | 3,721 |
Net charge-offs |  | 5,542 |  |  | 3,858 |  |  | 3,385 |  |  | 2,254 |  |  | 1,676 |  |  | 15,039 |  |  | 4,647 |
Balance at end of period |  | $ | 63,934 |  |  | $ | 64,517 |  |  | $ | 63,849 |  |  | $ | 63,099 |  |  | $ | 63,738 |  |  | $ | 63,934 |  |  | $ | 63,738 |
Average loans, net of deferred fees and costs |  | $ | 5,458,245 |  |  | $ | 5,507,248 |  |  | $ | 5,543,398 |  |  | $ | 5,525,988 |  |  | $ | 5,498,800 |  |  | $ | 5,508,530 |  |  | $ | 5,298,573 |
Ratio of annualized net charge-offs to average loans |  | 0.41 | % |  | 0.28 | % |  | 0.24 | % |  | 0.16 | % |  | 0.12 | % |  | 0.27 | % |  | 0.09 | %
Ratio of ACL to total loans |  | 1.18 | % |  | 1.17 | % |  | 1.16 | % |  | 1.14 | % |  | 1.15 | % |  | 1.18 | % |  | 1.15 | %

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

The Company uses certain non-GAAP financial measures in addition to our GAAP results to provide useful information for evaluating our cash operating performance, ability to service debt, compliance with debt covenants and measurement against competitors. This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be comparable to similarly entitled measures reported by other companies.
The Company believes that pre-provision net revenue ("PPNR"), a non-GAAP financial measure, is useful as a tool to help evaluate the ability to provide for credit costs through operations. The following tables set forth a reconciliation of our PPNR and our PPNR to average assets for each of the periods indicated:

|  | Three Months Ended |  | Year Ended
|  | Dec 31, |  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31, |  | Dec 31,
(Dollars in thousands) |  | 2023 |  | 2023 |  | 2023 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Net income |  | $ | 14,866 |  |  | $ | 13,141 |  |  | $ | 14,475 |  |  | $ | 16,187 |  |  | $ | 20,181 |  |  | $ | 58,669 |  |  | $ | 73,928 |
Add: Income tax expense |  | 4,273 |  |  | 4,349 |  |  | 4,472 |  |  | 5,059 |  |  | 6,700 |  |  | 18,153 |  |  | 24,841 |
Pre-tax income |  | 19,139 |  |  | 17,490 |  |  | 18,947 |  |  | 21,246 |  |  | 26,881 |  |  | 76,822 |  |  | 98,769 |
Add: Provision (credit) for credit losses |  | 4,653 |  |  | 4,874 |  |  | 4,319 |  |  | 1,852 |  |  | 571 |  |  | 15,698 |  |  | (1,273) |
PPNR |  | $ | 23,792 |  |  | $ | 22,364 |  |  | $ | 23,266 |  |  | $ | 23,098 |  |  | $ | 27,452 |  |  | $ | 92,520 |  |  | $ | 97,496 |

|  | Three Months Ended |  | Year Ended
|  | Dec 31, |  | Sep 30, |  | Jun 30, |  | Mar 31, |  | Dec 31, |  | Dec 31,
(Dollars in thousands) |  | 2023 |  | 2023 |  | 2023 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Net income |  | $ | 14,866 |  |  | $ | 13,141 |  |  | $ | 14,475 |  |  | $ | 16,187 |  |  | $ | 20,181 |  |  | $ | 58,669 |  |  | $ | 73,928 |
PPNR |  | 23,792 |  |  | 22,364 |  |  | 23,266 |  |  | 23,098 |  |  | 27,452 |  |  | 92,520 |  |  | 97,496 |
Average assets |  | 7,498,097 |  |  | 7,510,537 |  |  | 7,463,629 |  |  | 7,443,767 |  |  | 7,389,712 |  |  | 7,479,243 |  |  | 7,340,261 |
Return on average assets ("ROA") |  | 0.79 | % |  | 0.70 | % |  | 0.78 | % |  | 0.87 | % |  | 1.09 | % |  | 0.78 | % |  | 1.01 | %
PPNR to average assets |  | 1.27 | % |  | 1.19 | % |  | 1.25 | % |  | 1.24 | % |  | 1.49 | % |  | 1.24 | % |  | 1.33 | %