Central Pacific Financial Reports Fourth Quarter and Full Year 2024 Earnings

HONOLULU--(BUSINESS WIRE)--Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $11.3 million, or fully diluted earnings per share ("EPS") of $0.42 for the fourth quarter of 2024, compared to net income of $13.3 million, or EPS of $0.49 in the previous quarter and net income of $14.9 million, or EPS of $0.55 in the year-ago quarter. For the 2024 year, net income and EPS was $53.4 million and $1.97, respectively, compared to net income and EPS of $58.7 million and $2.17, respectively, in the 2023 year. Results for the fourth quarter of 2024 were impacted by a pre-tax loss related to an investment portfolio repositioning of $9.9 million. Results for the third quarter of 2024 were impacted by $3.1 million in pre-tax expenses related to our evaluation and assessment of a strategic opportunity, as previously reported. Excluding the aforementioned pre-tax items of $3.1 million and $9.9 million in the third and fourth quarters of 2024, respectively, adjusted net income and EPS (non-GAAP) for the third quarter was approximately $15.7 million and $0.58, respectively, compared to adjusted net income and EPS (non-GAAP) of $19.0 million and $0.70, respectively, in the fourth quarter of 2024. Excluding the aforementioned pre-tax items in the third and fourth quarters of 2024 totaling $13.0 million, adjusted net income and EPS (non-GAAP) for the 2024 year was $63.4 million and $2.34, respectively. "2024 was a solid year for Central Pacific Bank and we would like to send a sincere thank you to our valued customers and all the communities we serve. Key contributors to our success in 2024 included strong NIM expansion and core deposit growth, along with very healthy levels of liquidity, asset quality and capital," said Arnold Martines, Chairman, President and Chief Executive Officer. "We are proud to be recognized once again as one of America’s Best Regional Banks by Newsweek, one of the Best in State Banks by Forbes, and the Best Bank in Hawaii by readers of the Honolulu Star Advertiser. It is a testament to the hard work and exceptional customer service all of our employees consistently demonstrate. In 2025, we will continue to execute upon our strategies and build upon the success we've had in 2024." Earnings Highlights Net interest income was $55.8 million for the fourth quarter of 2024, which increased by $1.9 million, or 3.6% from the previous quarter, and increased by $4.6 million, or 9.1% from the year-ago quarter. Net interest margin ("NIM") was 3.17% for the fourth quarter of 2024, an increase of 10 basis points ("bp" or "bps") from the previous quarter and an increase of 33 bps from the year-ago quarter. The sequential quarter increase in net interest income and NIM was primarily due to a 15 bps decline in average rates paid on interest-bearing deposits, combined with a higher average yield earned on loans of 2 bps. During the fourth quarter of 2024, the Company completed an investment portfolio repositioning related to its available-for-sale investment securities portfolio. The Company sold lower-yielding available-for-sale debt securities with a book value of $106.5 million and received proceeds of $96.6 million, which resulted in a pre-tax loss of $9.9 million. Proceeds from the sale were reinvested in $101.6 million of higher-yielding debt securities. The Company estimates the transaction will result in a prospective annual increase to net interest income of $2.7 million and net interest margin of 4 bps. The earn-back period is estimated to be approximately 3.5 years. The securities sold had a weighted average yield of 2.1% and a weighted average duration of 3.6 years, and the securities purchased had a weighted average yield of 4.9% and a weighted average duration of 4.1 years. The Company recorded a provision for credit losses of $0.8 million in the fourth quarter of 2024, compared to a provision of $2.8 million in the previous quarter and a provision of $4.7 million in the year-ago quarter. The provision in the current quarter consisted of a provision for credit losses on loans of $1.4 million, offset by a credit to the provision for off-balance sheet exposures of $0.6 million. The lower provision for credit losses was primarily due to improvements in the economic forecast and movements in loan balances by segment, combined with an overall loan balance decline during the quarter. Other operating income totaled $2.6 million for the fourth quarter of 2024, compared to $12.7 million in the previous quarter and $15.2 million in the year-ago quarter. The lower other operating income was primarily due to the aforementioned pre-tax loss on sales of investment securities related to an investment portfolio repositioning of $9.9 million. Other operating expense totaled $44.2 million for the fourth quarter of 2024, compared to $46.7 million in the previous quarter and $42.5 million in the year-ago quarter. The sequential quarter reduction in other operating expense was primarily due to the aforementioned $3.1 million in expenses related to a strategic opportunity (included in other) in the third quarter of 2024. In addition, the Company recorded lower directors' deferred compensation plan expenses of $1.2 million (included in other). These decreases were partially offset by an impairment charge on intangible assets of $1.4 million (included in other) during the fourth quarter of 2024. The efficiency ratio was 75.65% for the fourth quarter of 2024, compared to 70.12% in the previous quarter and 64.12% in the year-ago quarter. Excluding the aforementioned pre-tax items, the adjusted efficiency ratio (non-GAAP) was 64.65% for the fourth quarter of 2024, compared to an adjusted efficiency ratio (non-GAAP) of 65.51% for the third quarter of 2024. The effective tax rate was 15.4% for the fourth quarter of 2024, compared to 22.0% in the previous quarter and 22.3% in the year-ago quarter. The decrease in the effective tax rate was primarily due to additional tax credits recognized and tax return to provision adjustments. Balance Sheet Highlights Total assets of $7.47 billion at December 31, 2024 increased by $56.7 million, or 0.8% from $7.42 billion at September 30, 2024, and decreased by $170.7 million, or 2.2% from $7.64 billion at December 31, 2023. The Company had $380.9 million in cash on its balance sheet and $2.49 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities at December 31, 2024. Total loans, net of deferred fees and costs, of $5.33 billion at December 31, 2024 decreased by $9.8 million, or 0.2% from $5.34 billion at September 30, 2024, and decreased by $106.1 million, or 2.0% from $5.44 billion at December 31, 2023. Average yields earned on loans during the fourth quarter of 2024 was 4.91%, compared to 4.89% in the previous quarter and 4.55% in the year-ago quarter. Total deposits of $6.64 billion at December 31, 2024 increased by $61.0 million, or 0.93% from $6.58 billion at September 30, 2024, and decreased by $203.6 million, or 3.0% from $6.85 billion at December 31, 2023. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $6.04 billion at December 31, 2024, and increased by $74.2 million, or 1.2% from $5.97 billion at September 30, 2024. Average rates paid on total deposits during the fourth quarter of 2024 was 1.21%, compared to 1.32% in the previous quarter and 1.22% in the year-ago quarter. Asset Quality Nonperforming assets totaled $11.0 million, or 0.15% of total assets at December 31, 2024, compared to $11.6 million, or 0.16% of total assets at September 30, 2024 and $7.0 million, or 0.09% of total assets at December 31, 2023. Net charge-offs totaled $3.8 million in the fourth quarter of 2024, compared to net charge-offs of $3.6 million in the previous quarter, and net charge-offs of $5.5 million in the year-ago quarter. Annualized net charge-offs as a percentage of average loans was 0.29%, 0.27% and 0.41% during the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively. The allowance for credit losses, as a percentage of total loans was 1.11% at December 31, 2024, compared to 1.15% at September 30, 2024, and 1.18% at December 31, 2023. Capital Total shareholders' equity was $538.4 million at December 31, 2024, compared to $543.7 million and $503.8 million at September 30, 2024 and December 31, 2023, respectively. The Company's leverage, common equity tier 1, tier 1 risk-based capital, and total risk-based capital ratios were 9.3%, 12.3%, 13.2%, and 15.4%, respectively, at December 31, 2024, compared to 9.5%, 12.1%, 13.1%, and 15.3%, respectively, at September 30, 2024. On January 28, 2025, the Company's Board of Directors declared a quarterly cash dividend of $0.27 per share on its outstanding common shares. The dividend represents an increase of 3.8% from the $0.26 per share in the fourth quarter of 2024 and will be payable on March 17, 2025 to shareholders of record at the close of business on February 28, 2025. On January 28, 2025, the Company's Board of Directors also authorized the repurchase of up to $30 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. During the year ended December 31, 2024, the Company repurchased 49,960 shares of common stock, at a total cost of $0.9 million, or an average cost per share of $18.92. During the year ended December 31, 2024, the Company returned $29.1 million in capital to its shareholders through cash dividends and share repurchases. Regulatory On January 10, 2025, the Bank received final approval from the Federal Reserve to become a member of the Federal Reserve System (the “Fed Membership”). Accordingly, upon the effective date, the Bank’s primary federal supervisor will be the Board of Governors of the Federal Reserve System, acting through authority delegated to the Federal Reserve Bank of San Francisco. The Fed Membership became effective on January 24, 2025. As a bank holding company, the Company is already supervised by the Federal Reserve Bank of San Francisco, and the Company believes that the Bank’s Fed Membership will streamline the Company’s regulatory oversight structure by having a single federal supervisor for both the Company and the Bank. Both the Company and the Bank will continue to be regulated by the Hawaii Division of Financial Institutions. The Bank’s deposits will continue to be insured by the Federal Deposit Insurance Corporation, in accordance with applicable limits. 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 1-800-715-9871 (conference ID: 6299769). A playback of the call will be available through February 28, 2025 by dialing 1-800-770-2030 (playback ID: 6299769) 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 $7.47 billion in assets as of December 31, 2024. Central Pacific Bank, its primary subsidiary, operates 27 branches and 55 ATMs in the State of Hawaii. Central Pacific Financial Corp. is traded on the New York Stock Exchange (NYSE) under the symbol "CPF." For additional information, please visit: cpb.bank Equal Housing Lender Member FDIC CPF Listed NYSE Forward-Looking Statements This document may contain forward-looking statements ("FLS") concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, payment or nonpayment of dividends, net interest income, 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," "seek," "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, 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 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 its variants) and other pandemic viruses 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 thereto; supply chain disruptions; labor contract disputes and potential strikes; 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; the impact of local, national, and international economies and events (including natural disasters such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, and earthquakes) on the Company's business and operations and on tourism, the military, and other major industries operating within the Hawaii market and any other markets in which the Company does business; deterioration or malaise in 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, 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, 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, and the effect of any recurring or special FDIC assessments; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the PCAOB, the FASB and other accounting standard setters and the cost and resources required to implement such changes; 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; securities market and monetary fluctuations, including the impact resulting from the elimination of the LIBOR Index; negative trends in our market capitalization and adverse changes in the price of the Company's common stock; the effects of any potential or actual acquisitions or dispositions we may make or evaluate, and the related costs; political instability; acts of war or terrorism; changes in consumer spending, borrowings and savings habits; technological changes and developments; cybersecurity and data privacy breaches and the consequence therefrom; failure to maintain effective internal control over financial reporting or disclosure controls and procedures; our ability to address deficiencies in our internal controls over financial reporting or disclosure controls and procedures; changes in the competitive environment among financial holding companies and other financial service providers; our ability to successfully implement our initiatives to lower our efficiency ratio; our ability to attract and retain key personnel; changes in our personnel, organization, compensation and benefit plans; our ability to successfully implement and achieve the objectives of our BaaS initiatives, including adoption of the initiatives by customers and risks faced by any of our bank collaborations including reputational and regulatory risk; 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 SEC 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) 2024 2024 2024 2024 2023 2024 2023 CONDENSED INCOME STATEMENT Net interest income $ 55,774 $ 53,851 $ 51,921 $ 50,187 $ 51,142 $ 211,733 $ 210,000 Provision for credit losses 818 2,833 2,239 3,936 4,653 9,826 15,698 Total other operating income 2,624 12,734 12,121 11,244 15,172 38,723 46,663 Total other operating expense 44,177 46,687 41,151 40,576 42,522 172,591 164,143 Income tax expense 2,058 3,760 4,835 3,974 4,273 14,627 18,153 Net income 11,345 13,305 15,817 12,945 14,866 53,412 58,669 Basic earnings per share $ 0.42 $ 0.49 $ 0.58 $ 0.48 $ 0.55 $ 1.97 $ 2.17 Diluted earnings per share 0.42 0.49 0.58 0.48 0.55 1.97 2.17 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] 0.62 % 0.72 % 0.86 % 0.70 % 0.79 % 0.72 % 0.78 % Return on average shareholders’ equity (ROE) [1] 8.37 10.02 12.42 10.33 12.55 10.25 12.38 Average shareholders’ equity to average assets 7.35 7.23 6.94 6.73 6.32 7.06 6.34 Efficiency ratio [2] 75.65 70.12 64.26 66.05 64.12 68.91 63.95 Net interest margin (NIM) [1] 3.17 3.07 2.97 2.83 2.84 3.01 2.94 Dividend payout ratio [3] 61.90 53.06 44.83 54.17 47.27 52.79 47.93 SELECTED AVERAGE BALANCES Average loans, including loans held for sale $ 5,315,802 $ 5,330,810 $ 5,385,829 $ 5,400,558 $ 5,458,245 $ 5,358,059 $ 5,508,530 Average interest-earning assets 7,052,296 7,022,910 7,032,515 7,140,264 7,208,613 7,061,864 7,169,463 Average assets 7,377,398 7,347,403 7,338,714 7,449,661 7,498,097 7,378,207 7,479,243 Average deposits 6,546,616 6,535,422 6,542,767 6,659,812 6,730,883 6,570,990 6,700,127 Average interest-bearing liabilities 4,906,623 4,904,460 4,910,998 5,009,542 5,023,321 4,932,757 4,938,705 Average shareholders’ equity 542,135 530,928 509,507 501,120 473,708 521,008 473,819 [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, 2024 2024 2024 2024 2023 REGULATORY CAPITAL RATIOS Central Pacific Financial Corp. Leverage ratio 9.3 % 9.5 % 9.3 % 9.0 % 8.8 % Common equity tier 1 capital ratio 12.3 12.1 11.9 11.6 11.4 Tier 1 risk-based capital ratio 13.2 13.1 12.8 12.6 12.4 Total risk-based capital ratio 15.4 15.3 15.1 14.8 14.6 Central Pacific Bank Leverage ratio 9.7 9.8 9.6 9.4 9.2 Common equity tier 1 capital ratio 13.8 13.6 13.3 13.1 12.9 Tier 1 risk-based capital ratio 13.8 13.6 13.3 13.1 12.9 Total risk-based capital ratio 14.9 14.8 14.5 14.3 14.1 Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, (dollars in thousands, except for per share amounts) 2024 2024 2024 2024 2023 BALANCE SHEET Total loans, net of deferred fees and costs $ 5,332,852 $ 5,342,609 $ 5,383,644 $ 5,401,417 $ 5,438,982 Total assets 7,472,096 7,415,430 7,386,952 7,409,999 7,642,796 Total deposits 6,644,011 6,583,013 6,582,455 6,618,854 6,847,592 Long-term debt 156,345 156,284 156,223 156,163 156,102 Total shareholders’ equity 538,385 543,725 518,647 507,203 503,815 Total shareholders’ equity to total assets 7.21 % 7.33 % 7.02 % 6.84 % 6.59 % ASSET QUALITY Allowance for credit losses (ACL) $ 59,182 $ 61,647 $ 62,225 $ 63,532 $ 63,934 Nonaccrual loans 11,018 11,597 10,257 10,132 7,008 Non-performing assets (NPA) 11,018 11,597 10,257 10,132 7,008 Ratio of ACL to total loans 1.11 % 1.15 % 1.16 % 1.18 % 1.18 % Ratio of NPA to total assets 0.15 % 0.16 % 0.14 % 0.14 % 0.09 % PER SHARE OF COMMON STOCK OUTSTANDING Book value per common share $ 19.89 $ 20.09 $ 19.16 $ 18.76 $ 18.63 Closing market price per common share 29.05 29.51 21.20 19.75 19.68 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) 2024 2024 2024 2024 2023 ASSETS Cash and due from financial institutions $ 77,774 $ 100,064 $ 103,829 $ 98,410 $ 116,181 Interest-bearing deposits in other financial institutions 303,167 226,505 195,062 214,472 406,256 Investment securities: Available-for-sale debt securities, at fair value 737,658 723,453 676,719 660,833 647,210 Held-to-maturity debt securities, at amortized cost; fair value of: $506,681 at December 31, 2024, $546,990 at September 30, 2024, $528,088 at June 30, 2024, $541,685 at March 31, 2024, and $565,178 at December 31, 2023 596,930 606,117 615,867 624,948 632,338 Total investment securities 1,334,588 1,329,570 1,292,586 1,285,781 1,279,548 Loans held for sale 5,662 1,609 3,950 755 1,778 Loans, net of deferred fees and costs 5,332,852 5,342,609 5,383,644 5,401,417 5,438,982 Less: allowance for credit losses (59,182 ) (61,647 ) (62,225 ) (63,532 ) (63,934 ) Loans, net of allowance for credit losses 5,273,670 5,280,962 5,321,419 5,337,885 5,375,048 Premises and equipment, net 104,342 104,575 100,646 97,688 96,184 Accrued interest receivable 23,378 23,942 23,184 21,957 21,511 Investment in unconsolidated entities 52,417 54,836 40,155 40,780 41,546 Mortgage servicing rights 8,473 8,513 8,636 8,599 8,696 Bank-owned life insurance 176,216 175,914 173,716 172,228 170,706 Federal Home Loan Bank of Des Moines ("FHLB") stock 6,929 6,929 6,925 6,921 6,793 Right-of-use lease assets 30,824 32,192 32,081 32,079 29,720 Other assets 74,656 69,819 84,763 92,444 88,829 Total assets $ 7,472,096 $ 7,415,430 $ 7,386,952 $ 7,409,999 $ 7,642,796 LIABILITIES Deposits: Noninterest-bearing demand $ 1,888,937 $ 1,838,009 $ 1,847,173 $ 1,848,554 $ 1,913,379 Interest-bearing demand 1,338,719 1,255,382 1,283,669 1,290,321 1,329,189 Savings and money market 2,329,170 2,336,323 2,234,111 2,211,966 2,209,733 Time 1,087,185 1,153,299 1,217,502 1,268,013 1,395,291 Total deposits 6,644,011 6,583,013 6,582,455 6,618,854 6,847,592 Long-term debt, net of unamortized debt issuance costs of: $202 at December 31, 2024, $263 at September 30, 2024, $324 at June 30, 2024, $384 at March 31, 2024, and $445 at December 31, 2023 156,345 156,284 156,223 156,163 156,102 Lease liabilities 32,025 33,807 33,422 33,169 30,634 Accrued interest payable 10,051 12,980 14,998 16,654 18,948 Other liabilities 91,279 85,621 81,207 77,956 85,705 Total liabilities 6,933,711 6,871,705 6,868,305 6,902,796 7,138,981 SHAREHOLDERS' EQUITY Shareholders' equity: Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none at December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023 — — — — — Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 27,065,570 at December 31, 2024, 27,064,501 at September 30, 2024, 27,063,644 at June 30, 2024, 27,042,326 at March 31, 2024, and 27,045,033 at December 31, 2023 404,494 404,494 404,494 404,494 405,439 Additional paid-in capital 105,054 104,794 104,161 103,130 102,982 Retained earnings 143,259 138,951 132,683 123,902 117,990 Accumulated other comprehensive loss (114,422 ) (104,514 ) (122,691 ) (124,323 ) (122,596 ) Total shareholders' equity 538,385 543,725 518,647 507,203 503,815 Total liabilities and shareholders' equity $ 7,472,096 $ 7,415,430 $ 7,386,952 $ 7,409,999 $ 7,642,796 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) 2024 2024 2024 2024 2023 2024 2023 Interest income: Interest and fees on loans $ 65,482 $ 65,469 $ 64,422 $ 62,819 $ 62,429 $ 258,192 $ 243,315 Interest and dividends on investment securities: Taxable investment securities 8,626 8,975 8,466 7,211 7,292 33,278 28,789 Tax-exempt investment securities 723 551 598 655 686 2,527 2,912 Interest on deposits in other financial institutions 3,004 2,775 2,203 3,611 3,597 11,593 7,163 Dividend income on FHLB stock 125 127 151 106 109 509 478 Total interest income 77,960 77,897 75,840 74,402 74,113 306,099 282,657 Interest expense: Interest on deposits: Interest-bearing demand 686 484 490 499 467 2,159 1,701 Savings and money market 9,388 10,235 8,977 8,443 7,459 37,043 21,979 Time 9,881 11,040 12,173 12,990 12,741 46,084 39,205 Interest on short-term borrowings — — 1 — — 1 1,139 Interest on long-term debt 2,231 2,287 2,278 2,283 2,304 9,079 8,633 Total interest expense 22,186 24,046 23,919 24,215 22,971 94,366 72,657 Net interest income 55,774 53,851 51,921 50,187 51,142 211,733 210,000 Provision for credit losses 818 2,833 2,239 3,936 4,653 9,826 15,698 Net interest income after provision for credit losses 54,956 51,018 49,682 46,251 46,489 201,907 194,302 Other operating income: Mortgage banking income 913 822 1,040 613 611 3,388 2,592 Service charges on deposit accounts 2,251 2,167 2,135 2,103 2,312 8,656 8,753 Other service charges and fees 5,476 5,947 5,869 5,261 5,349 22,553 20,531 Income from fiduciary activities 1,430 1,447 1,449 1,435 1,272 5,761 4,895 Income from bank-owned life insurance 1,966 1,897 1,234 1,522 2,015 6,619 4,870 Net loss on sales of investment securities (9,934 ) — — — (1,939 ) (9,934 ) (2,074 ) Other 522 454 394 310 5,552 1,680 7,096 Total other operating income 2,624 12,734 12,121 11,244 15,172 38,723 46,663 Other operating expense: Salaries and employee benefits 21,661 22,299 21,246 20,735 20,164 85,941 82,050 Net occupancy 4,192 4,612 4,597 4,600 4,676 18,001 18,185 Computer software 4,757 4,590 4,381 4,287 4,026 18,015 17,726 Legal and professional services 2,504 2,460 2,506 2,320 2,245 9,790 9,959 Equipment 904 972 995 1,010 968 3,881 3,958 Advertising 911 889 901 914 1,045 3,615 3,888 Communication 943 740 657 837 632 3,177 3,010 Other 8,305 10,125 5,868 5,873 8,766 30,171 25,367 Total other operating expense 44,177 46,687 41,151 40,576 42,522 172,591 164,143 Income before income taxes 13,403 17,065 20,652 16,919 19,139 68,039 76,822 Income tax expense 2,058 3,760 4,835 3,974 4,273 14,627 18,153 Net income $ 11,345 $ 13,305 $ 15,817 $ 12,945 $ 14,866 $ 53,412 $ 58,669 Per common share data: Basic earnings per share $ 0.42 $ 0.49 $ 0.58 $ 0.48 $ 0.55 $ 1.97 $ 2.17 Diluted earnings per share 0.42 0.49 0.58 0.48 0.55 1.97 2.17 Cash dividends declared 0.26 0.26 0.26 0.26 0.26 1.04 1.04 Basic weighted average shares outstanding 27,065,047 27,064,035 27,053,549 27,046,525 27,044,121 27,057,329 27,027,681 Diluted weighted average shares outstanding 27,221,121 27,194,625 27,116,349 27,099,101 27,097,285 27,157,120 27,080,518 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, 2024 September 30, 2024 December 31, 2023 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 $ 250,493 4.77 % $ 3,004 $ 203,657 5.42 % $ 2,775 $ 261,594 5.45 % $ 3,597 Investment securities: Taxable 1,338,569 2.58 8,626 1,340,347 2.68 8,975 1,331,752 2.19 7,292 Tax-exempt [1] 140,503 2.60 915 141,168 1.98 697 146,803 2.36 868 Total investment securities 1,479,072 2.58 9,541 1,481,515 2.61 9,672 1,478,555 2.21 8,160 Loans, including loans held for sale 5,315,802 4.91 65,482 5,330,810 4.89 65,469 5,458,245 4.55 62,429 FHLB stock 6,929 7.23 125 6,928 7.31 127 10,219 4.30 109 Total interest-earning assets 7,052,296 4.42 78,152 7,022,910 4.43 78,043 7,208,613 4.10 74,295 Noninterest-earning assets 325,102 324,493 289,484 Total assets $ 7,377,398 $ 7,347,403 $ 7,498,097 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Interest-bearing demand deposits $ 1,312,561 0.21 % $ 686 $ 1,267,135 0.15 % $ 484 $ 1,315,943 0.14 % $ 467 Savings and money market deposits 2,313,293 1.61 9,388 2,298,853 1.77 10,235 2,217,065 1.33 7,459 Time deposits up to $250,000 518,540 2.99 3,900 534,497 3.15 4,238 478,085 2.80 3,373 Time deposits over $250,000 605,920 3.93 5,981 647,728 4.18 6,802 856,159 4.34 9,368 Total interest-bearing deposits 4,750,314 1.67 19,955 4,748,213 1.82 21,759 4,867,252 1.68 20,667 Federal funds purchased and securities sold 2 5.57 — — — — — — — FHLB advances and other short-term borrowings 2 5.04 — — — — — — — Long-term debt 156,305 5.68 2,231 156,247 5.82 2,287 156,069 5.86 2,304 Total interest-bearing liabilities 4,906,623 1.80 22,186 4,904,460 1.95 24,046 5,023,321 1.81 22,971 Noninterest-bearing deposits 1,796,302 1,787,209 1,863,631 Other liabilities 132,338 124,806 137,437 Total liabilities 6,835,263 6,816,475 7,024,389 Total shareholders' equity 542,135 530,928 473,708 Total liabilities and shareholders' equity $ 7,377,398 $ 7,347,403 $ 7,498,097 Net interest income $ 55,966 $ 53,997 $ 51,324 Interest rate spread 2.62 % 2.48 % 2.29 % Net interest margin 3.17 % 3.07 % 2.84 % [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, 2024 December 31, 2023 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 $ 220,526 5.26 % $ 11,593 $ 134,150 5.34 % $ 7,163 Investment securities: Taxable 1,334,695 2.49 33,278 1,365,067 2.11 28,789 Tax-exempt [1] 141,688 2.26 3,199 150,399 2.45 3,686 Total investment securities 1,476,383 2.47 36,477 1,515,466 2.14 32,475 Loans, including loans held for sale 5,358,059 4.82 258,192 5,508,530 4.42 243,315 FHLB stock 6,896 7.38 509 11,317 4.23 478 Total interest-earning assets 7,061,864 4.34 306,771 7,169,463 3.95 283,431 Noninterest-earning assets 316,343 309,780 Total assets $ 7,378,207 $ 7,479,243 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Interest-bearing demand deposits $ 1,287,628 0.17 % $ 2,159 $ 1,359,240 0.13 % $ 1,701 Savings and money market deposits 2,263,273 1.64 37,043 2,195,763 1.00 21,979 Time deposits up to $250,000 538,216 3.16 17,025 415,541 2.15 8,917 Time deposits over $250,000 687,404 4.23 29,059 795,917 3.81 30,288 Total interest-bearing deposits 4,776,521 1.79 85,286 4,766,461 1.32 62,885 Federal funds purchased and securities sold 1 5.57 — — — — FHLB advances and other short-term borrowings 17 5.58 1 23,322 4.88 1,139 Long-term debt 156,218 5.81 9,079 148,922 5.80 8,633 Total interest-bearing liabilities 4,932,757 1.91 94,366 4,938,705 1.47 72,657 Noninterest-bearing deposits 1,794,469 1,933,666 Other liabilities 129,973 133,053 Total liabilities 6,857,199 7,005,424 Total shareholders' equity 521,008 473,819 Total liabilities and shareholders' equity $ 7,378,207 $ 7,479,243 Net interest income $ 212,405 $ 210,774 Interest rate spread 2.43 % 2.48 % Net interest margin 3.01 % 2.94 % [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) 2024 2024 2024 2024 2023 HAWAII: Commercial and industrial $ 430,167 $ 411,209 $ 415,538 $ 420,009 $ 421,736 Real estate: Construction 145,182 134,043 147,657 145,213 163,337 Residential mortgage 1,892,520 1,897,919 1,913,177 1,924,889 1,927,789 Home equity 676,982 697,123 706,811 729,210 736,524 Commercial mortgage 1,165,060 1,157,625 1,150,703 1,103,174 1,063,969 Consumer 274,712 277,849 287,295 306,563 322,346 Total loans, net of deferred fees and costs 4,584,623 4,575,768 4,621,181 4,629,058 4,635,701 Less: Allowance for credit losses (45,967 ) (47,789 ) (47,902 ) (48,739 ) (48,189 ) Loans, net of allowance for credit losses $ 4,538,656 $ 4,527,979 $ 4,573,279 $ 4,580,319 $ 4,587,512 U.S. MAINLAND: [1] Commercial and industrial $ 176,769 $ 188,238 $ 169,318 $ 156,087 $ 153,971 Real estate: Construction 29 24,083 23,865 23,356 22,182 Commercial mortgage 335,620 312,685 314,667 319,088 318,933 Consumer 235,811 241,835 254,613 273,828 308,195 Total loans, net of deferred fees and costs 748,229 766,841 762,463 772,359 803,281 Less: Allowance for credit losses (13,215 ) (13,858 ) (14,323 ) (14,793 ) (15,745 ) Loans, net of allowance for credit losses $ 735,014 $ 752,983 $ 748,140 $ 757,566 $ 787,536 TOTAL: Commercial and industrial $ 606,936 $ 599,447 $ 584,856 $ 576,096 $ 575,707 Real estate: Construction 145,211 158,126 171,522 168,569 185,519 Residential mortgage 1,892,520 1,897,919 1,913,177 1,924,889 1,927,789 Home equity 676,982 697,123 706,811 729,210 736,524 Commercial mortgage 1,500,680 1,470,310 1,465,370 1,422,262 1,382,902 Consumer 510,523 519,684 541,908 580,391 630,541 Total loans, net of deferred fees and costs 5,332,852 5,342,609 5,383,644 5,401,417 5,438,982 Less: Allowance for credit losses (59,182 ) (61,647 ) (62,225 ) (63,532 ) (63,934 ) Loans, net of allowance for credit losses $ 5,273,670 $ 5,280,962 $ 5,321,419 $ 5,337,885 $ 5,375,048 [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) 2024 2024 2024 2024 2023 Noninterest-bearing demand $ 1,888,937 $ 1,838,009 $ 1,847,173 $ 1,848,554 $ 1,913,379 Interest-bearing demand 1,338,719 1,255,382 1,283,669 1,290,321 1,329,189 Savings and money market 2,329,170 2,336,323 2,234,111 2,211,966 2,209,733 Time deposits up to $250,000 483,378 536,316 547,212 544,600 533,898 Core deposits 6,040,204 5,966,030 5,912,165 5,895,441 5,986,199 Other time deposits greater than $250,000 500,693 492,221 476,457 487,950 486,812 Government time deposits 103,114 124,762 193,833 235,463 374,581 Total time deposits greater than $250,000 603,807 616,983 670,290 723,413 861,393 Total deposits $ 6,644,011 $ 6,583,013 $ 6,582,455 $ 6,618,854 $ 6,847,592 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) 2024 2024 2024 2024 2023 Nonaccrual loans: Commercial and industrial $ 414 $ 376 $ 355 $ 357 $ 432 Real estate: Residential mortgage 9,044 9,680 7,991 7,979 4,962 Home equity 952 915 1,247 929 834 Commercial mortgage — — 77 77 77 Consumer 608 626 587 790 703 Total nonaccrual loans 11,018 11,597 10,257 10,132 7,008 Other real estate owned ("OREO") — — — — — Total nonperforming assets ("NPAs") 11,018 11,597 10,257 10,132 7,008 Accruing loans 90+ days past due: Real estate: Construction — — — 588 — Residential mortgage 323 13 1,273 386 — Home equity 78 135 135 560 229 Consumer 373 481 896 924 1,083 Total accruing loans 90+ days past due 774 629 2,304 2,458 1,312 Total NPAs and accruing loans 90+ days past due $ 11,792 $ 12,226 $ 12,561 $ 12,590 $ 8,320 Ratio of total nonaccrual loans to total loans 0.21 % 0.22 % 0.19 % 0.19 % 0.13 % Ratio of total NPAs to total assets 0.15 0.16 0.14 0.14 0.09 Ratio of total NPAs to total loans and OREO 0.21 0.22 0.19 0.19 0.13 Ratio of total NPAs and accruing loans 90+ days past due to total loans and OREO 0.22 0.23 0.23 0.23 0.15 Quarter-to-quarter changes in NPAs: Balance at beginning of quarter $ 11,597 $ 10,257 $ 10,132 $ 7,008 $ 6,652 Additions 1,436 3,484 1,920 4,792 1,836 Reductions: Payments (763 ) (602 ) (363 ) (263 ) (268 ) Return to accrual status (71 ) (354 ) (27 ) (198 ) (137 ) Charge-offs, valuation and other adjustments (1,181 ) (1,188 ) (1,405 ) (1,207 ) (1,075 ) Total reductions (2,015 ) (2,144 ) (1,795 ) (1,668 ) (1,480 ) Balance at end of quarter $ 11,018 $ 11,597 $ 10,257 $ 10,132 $ 7,008 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) 2024 2024 2024 2024 2023 2024 2023 Allowance for credit losses: Balance at beginning of period $ 61,647 $ 62,225 $ 63,532 $ 63,934 $ 64,517 $ 63,934 $ 63,738 Provision for credit losses on loans 1,353 3,040 2,448 4,121 4,959 10,962 15,235 Charge-offs: Commercial and industrial (1,113 ) (663 ) (519 ) (682 ) (419 ) (2,977 ) (1,962 ) Real estate: Residential mortgage — (99 ) (284 ) — — (383 ) — Consumer. (3,727 ) (3,956 ) (4,345 ) (4,838 ) (5,976 ) (16,866 ) (17,245 ) Total charge-offs (4,840 ) (4,718 ) (5,148 ) (5,520 ) (6,395 ) (20,226 ) (19,207 ) Recoveries: Commercial and industrial 158 158 130 90 84 536 720 Real estate: Construction — — — — — — 1 Residential mortgage 11 8 9 8 7 36 77 Home equity — — — 6 42 6 57 Consumer 853 934 1,254 893 720 3,934 3,313 Total recoveries 1,022 1,100 1,393 997 853 4,512 4,168 Net charge-offs (3,818 ) (3,618 ) (3,755 ) (4,523 ) (5,542 ) (15,714 ) (15,039 ) Balance at end of period $ 59,182 $ 61,647 $ 62,225 $ 63,532 $ 63,934 $ 59,182 $ 63,934 Average loans, net of deferred fees and costs $ 5,315,802 $ 5,330,810 $ 5,385,829 $ 5,400,558 $ 5,458,245 $ 5,358,059 $ 5,508,530 Ratio of annualized net charge-offs to average loans 0.29 % 0.27 % 0.28 % 0.34 % 0.41 % 0.29 % 0.27 % Ratio of ACL to total loans 1.11 1.15 1.16 1.18 1.18 1.11 % 1.18 % CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (Unaudited) TABLE 10 To supplement our consolidated financial information, the Company uses certain non-GAAP financial measures, which are not meant to be considered in isolation or as a substitute for comparable GAAP. The Company believes these non-GAAP financial measures provide useful information to investors and others, which excludes transactions that are not meaningful in comparison to our past operating performance or not reflective of ongoing financial results. The Company believes that these measures offer a supplemental measure for period-to-period comparisons and can be used to evaluate our historical and prospective financial performance. These non-GAAP financial measures may not be comparable to similarly entitled measures reported by other companies. The following reconciling adjustments from GAAP or reported financial measures to non-GAAP adjusted financial measures are limited to: (i) pre-tax loss on sales of investment securities related to an investment portfolio repositioning of $9.9 million and $1.9 million in the fourth quarter of 2024 and fourth quarter of 2023, respectively, (ii) $3.1 million in pre-tax expenses related to our evaluation and assessment of a strategic opportunity in the third quarter of 2024, (iii) a pre-tax gain on sale of a real estate property of $5.1 million in the fourth quarter of 2023 and (iv) pre-tax branch lease termination expense of $2.3 million in the fourth quarter of 2023. Management does not consider these transactions to be representative of the Company's core operating performance. The income tax effect was calculated assuming a 23% effective tax rate. Three Months Ended December 31, 2024 Three Months Ended September 30, 2024 Three Months Ended December 31, 2023 (dollars in thousands, Non-GAAP Non-GAAP Non-GAAP except per share data) Reported Adjusted Reported Adjusted Reported Adjusted Financial measures: Net income $ 11,345 $ 18,994 $ 13,305 $ 15,667 $ 14,866 $ 14,161 Diluted earnings per share ("EPS") $ 0.42 $ 0.70 $ 0.49 $ 0.58 $ 0.55 $ 0.52 Pre-provision net revenue (non-GAAP) $ 14,221 $ 24,155 $ 19,898 $ 22,966 $ 23,792 $ 22,877 Efficiency ratio (non-GAAP) 75.65 % 64.65 % 70.12 % 65.51 % 64.12 % 63.76 % Return on average assets ("ROA") 0.62 % 1.03 % 0.72 % 0.85 % 0.79 % 0.76 % Return on average shareholders' equity ("ROE") 8.37 % 13.82 % 10.02 % 11.75 % 12.55 % 11.98 % As of December 31, 2024, September 30, 2024 and December 31, 2023: Tangible common equity ("TCE") ratio (non-GAAP) 7.21 % 7.33 % 7.31 % 7.34 % 6.57 % 6.57 % Year Ended December 31, 2024 Year Ended December 31, 2023 (dollars in thousands, Non-GAAP Non-GAAP except per share data) Reported Adjusted Reported Adjusted Financial measures: Net income $ 53,412 $ 63,423 $ 58,669 $ 57,964 Diluted earnings per share ("EPS") $ 1.97 $ 2.34 $ 2.17 $ 2.14 Pre-provision net revenue (non-GAAP) $ 77,865 $ 90,867 $ 92,520 $ 91,605 Efficiency ratio (non-GAAP) 68.91 % 65.10 % 63.95 % 63.86 % Return on average assets ("ROA") 0.72 % 0.86 % 0.78 % 0.78 % Return on average shareholders' equity ("ROE") 10.25 % 12.10 % 12.38 % 12.24 % CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (Unaudited) TABLE 10 (CONTINUED) The following table presents a recalculation of the non-GAAP core earnings and non-GAAP EPS presented above. Three Months Ended Year Ended (dollars in thousands, except per share data) Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 GAAP net income $ 11,345 $ 13,305 $ 14,866 $ 53,412 $ 58,669 Add: Pre-tax net loss related to an investment portfolio repositioning 9,934 — 1,939 9,934 1,939 Less: Pre-tax net gain on sale of a real estate property — — (5,128 ) — (5,128 ) Add: Pre-tax expenses related to a strategic opportunity — 3,068 — 3,068 — Add: Pre-tax branch lease termination expense — — 2,274 — 2,274 Total pre-tax adjustments (non-GAAP) 9,934 3,068 (915 ) 13,002 (915 ) Less: Income tax effect (assumes 23% ETR) (2,285 ) (706 ) 210 (2,991 ) 210 Total adjustments, net of tax (non-GAAP) 7,649 2,362 (705 ) 10,011 (705 ) Adjusted net income (non-GAAP) $ 18,994 $ 15,667 $ 14,161 $ 63,423 $ 57,964 Diluted weighted average shares outstanding 27,221,121 27,194,625 27,097,285 27,157,120 27,080,518 GAAP EPS $ 0.42 $ 0.49 $ 0.55 $ 1.97 $ 2.17 Add: Total adjustments, net of tax (non-GAAP) 0.28 0.09 (0.03 ) 0.37 (0.03 ) Adjusted EPS (non-GAAP) $ 0.70 $ 0.58 $ 0.52 $ 2.34 $ 2.14 The following table presents a recalculation of the non-GAAP adjusted pre-provision net revenue ("PPNR") presented above. Three Months Ended Year Ended (dollars in thousands) Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 GAAP net income $ 11,345 $ 13,305 $ 14,866 $ 53,412 $ 58,669 Add: Income tax expense 2,058 3,760 4,273 14,627 18,153 GAAP pre-tax income 13,403 17,065 19,139 68,039 76,822 Add: Provision for credit losses 818 2,833 4,653 9,826 15,698 Pre-provision net revenue ("PPNR") (non-GAAP) 14,221 19,898 23,792 77,865 92,520 Add: Total pre-tax adjustments (non-GAAP) 9,934 3,068 (915 ) 13,002 (915 ) Adjusted PPNR (non-GAAP) $ 24,155 $ 22,966 $ 22,877 $ 90,867 $ 91,605 CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (Unaudited) TABLE 10 (CONTINUED) The following table presents a recalculation of the non-GAAP adjusted efficiency ratio presented above. Three Months Ended Year Ended (dollars in thousands) Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Total other operating expense $ 44,177 $ 46,687 $ 42,522 $ 172,591 $ 164,143 Less: Expenses related to a strategic opportunity — (3,068 ) — (3,068 ) — Less: Branch lease termination expense — — (2,274 ) — (2,274 ) Total other operating expense adjustments (non-GAAP) — (3,068 ) (2,274 ) (3,068 ) (2,274 ) Adjusted total other operating expense (non-GAAP) $ 44,177 $ 43,619 $ 40,248 $ 169,523 $ 161,869 Net interest income $ 55,774 $ 53,851 $ 51,142 $ 211,733 $ 210,000 Total other operating income 2,624 12,734 15,172 38,723 46,663 Add: Net loss related to an investment portfolio repositioning 9,934 — 1,939 9,934 1,939 Less: Net gain on sale of a real estate property — — (5,128 ) — (5,128 ) Total other operating income adjustments (non-GAAP) 9,934 — (3,189 ) 9,934 (3,189 ) Adjusted total other operating income (non-GAAP) 12,558 12,734 11,983 48,657 43,474 Total revenue $ 58,398 $ 66,585 $ 66,314 $ 250,456 $ 256,663 Adjusted total revenue (non-GAAP) $ 68,332 $ 66,585 $ 63,125 $ 260,390 $ 253,474 Efficiency ratio (non-GAAP) 75.65 % 70.12 % 64.12 % 68.91 % 63.95 % Less: Total pre-tax adjustments (non-GAAP) (11.00 )% (4.61 )% (0.36 )% (3.81 )% (0.09 )% Adjusted efficiency ratio (non-GAAP) 64.65 % 65.51 % 63.76 % 65.10 % 63.86 % CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (Unaudited) TABLE 10 (CONTINUED) The following table presents a recalculation of the non-GAAP adjusted ROA and adjusted ROE presented above. Three Months Ended Year Ended (dollars in thousands) Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Average assets $ 7,377,398 $ 7,347,403 $ 7,498,097 $ 7,378,207 $ 7,479,243 Add: Total adjustments, net of tax (non-GAAP) 7,649 2,362 (705 ) 3,093 (176 ) Adjusted average assets (non-GAAP) $ 7,385,047 $ 7,349,765 $ 7,497,392 $ 7,381,300 $ 7,479,067 ROA (GAAP net income to average assets) 0.62 % 0.72 % 0.79 % 0.72 % 0.78 % Add: Total adjustments, net of tax (non-GAAP) 0.41 0.13 (0.03 ) 0.14 — Adjusted ROA (non-GAAP) 1.03 % 0.85 % 0.76 % 0.86 % 0.78 % Average shareholders' equity $ 542,135 $ 530,928 $ 473,708 $ 521,008 $ 473,819 Add: Total adjustments, net of tax (non-GAAP) 7,649 2,362 (705 ) 3,093 (176 ) Adjusted average shareholders' equity (non-GAAP) $ 549,784 $ 533,290 $ 473,003 $ 524,101 $ 473,643 ROE (GAAP net income to average shareholders' equity) 8.37 % 10.02 % 12.55 % 10.25 % 12.38 % Add: Total adjustments, net of tax (non-GAAP) 5.45 1.73 (0.57 ) 1.85 (0.14 ) Adjusted ROE (non-GAAP) 13.82 % 11.75 % 11.98 % 12.10 % 12.24 % The following table presents a recalculation of the non-GAAP tangible common equity ("TCE") ratio presented above. (dollars in thousands) December 31, 2024 September 30, 2024 December 31, 2023 Total shareholders' equity $ 538,385 $ 543,725 $ 503,815 Less: Intangible assets — (1,390 ) (1,461 ) TCE 538,385 542,335 502,354 Add: Total adjustments, net of tax (non-GAAP) 10,011 2,362 (705 ) Adjusted TCE (non-GAAP) $ 548,396 $ 544,697 $ 501,649 Total assets $ 7,472,096 $ 7,415,430 $ 7,642,796 Less: Intangible assets — (1,390 ) (1,461 ) Tangible assets 7,472,096 7,414,040 7,641,335 Add: Total adjustments, net of tax (non-GAAP) 10,011 2,362 (705 ) Adjusted tangible assets (non-GAAP) $ 7,482,107 $ 7,416,402 $ 7,640,630 TCE ratio (non-GAAP) (TCE to tangible assets) 7.21 % 7.31 % 6.57 % Add: Total adjustments, net of tax (non-GAAP) 0.12 0.03 — Adjusted TCE ratio (non-GAAP) 7.33 % 7.34 % 6.57 %

Central Pacific Financial Reports Fourth Quarter and Full Year 2024 Earnings

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