Central Pacific Financial Reports Third Quarter 2025 Earnings of $18.6 Million

“Central Pacific delivered another strong quarter, highlighted by continued margin expansion, solid earnings, and growth in both loans and deposits,” said Arnold Martines, Chairman, President and CEO. “Our net interest margin increased to 3.49%, reflecting disciplined balance sheet management and improved asset yields. With our strong earnings and capital position, in the fourth quarter we will redeem our subordinated debt and increase our quarterly cash dividend. Additionally, our new partnership with Kyoto Shinkin Bank marks an exciting step forward in deepening Hawaii–Japan business ties and expanding our international reach. These achievements reflect our continued positive momentum and commitment to providing exceptional service to our customers, and delivering long-term value to our shareholders.”

Earnings Highlights

Net interest income for the third quarter of 2025 totaled $61.3 million, which increased by $1.5 million, or 2.5% from the prior quarter, and increased by $7.5 million, or 13.8%, compared to the same quarter last year. Net interest margin ("NIM") for the third quarter of 2025 was 3.49%, an increase of 5 basis points ("bp" or "bps") from the prior quarter, and an increase of 42 bps from the same quarter last year. The sequential quarter increase in net interest income and NIM was primarily driven by higher average yields earned on loans, up 5 bps, and investment securities, up 3 bps, partially offset by a 2 bps increase in average rates paid on interest-bearing deposits.

The Company recorded a provision for credit losses of $4.2 million in the third quarter of 2025, compared to a provision of $5.0 million in the prior quarter, and a provision of $2.8 million in the same quarter last year. The current quarter provision for credit losses included $3.4 million for credit losses on loans and $0.8 million for off-balance sheet exposures. The decrease from prior quarter was primarily driven by lower net charge-offs.

Other operating income for the third quarter of 2025 totaled $13.5 million, compared to $13.0 million in the prior quarter, and $12.7 million in the same quarter last year. The increase was largely driven by a $0.5 million increase in investment services income, included in other service charges and fees.

Other operating expense for the third quarter of 2025 totaled $47.0 million, compared to $43.9 million in the prior quarter, and $46.7 million in the same quarter last year. The increase was primarily attributable to higher salaries and employee benefits of $2.1 million related to incentive accruals and commissions, and $1.5 million in one-time expenses related to the operations center consolidation.

The efficiency ratio was 62.84% in the third quarter of 2025, compared to 60.36% in the prior quarter and 70.12% in the same quarter last year. Excluding the $1.5 million in expenses related to the operations center consolidation, the adjusted efficiency ratio (non-GAAP) was 60.81% for the third quarter of 2025.

The effective tax rate for the third quarter of 2025 was 21.4%, compared to 23.5% in the prior quarter, and 22.0% in the same quarter last year. The decrease in the Company's effective tax rate in the third quarter of 2025 was primarily attributable to the impact of the donation of real estate in connection with the consolidation of its operations center, and an increase in projected tax-exempt income.

Balance Sheet Highlights

As of September 30, 2025, total assets were $7.42 billion, which increased by $51.9 million, or 0.7% from $7.37 billion at June 30, 2025, and an increase of $6.0 million, or 0.08% from $7.42 billion at September 30, 2024.

Total loans, net of deferred fees and costs, were $5.37 billion at September 30, 2025, which increased by $77.4 million, or 1.5% from $5.29 billion at June 30, 2025, and increased by $24.6 million, or 0.5% from $5.34 billion at September 30, 2024. The average yield earned on loans during the third quarter of 2025 was 5.01%, compared to 4.96% in the prior quarter and 4.89% in the same quarter last year.

Total deposits were $6.58 billion at September 30, 2025, which increased by $32.7 million or 0.5% from $6.54 billion at June 30, 2025, and decreased by $5.3 million, or 0.1% from $6.58 billion at September 30, 2024. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.98 billion at September 30, 2025. Core deposits increased by $24.6 million, or 0.4% from $5.96 billion at June 30, 2025, and increased by $15.2 million, or 0.3% from $5.97 billion at September 30, 2024. The average rate paid on total deposits during the third quarter of 2025 was 1.02%, compared to 1.02% in the prior quarter, and 1.32% in the same quarter last year.

Asset Quality

Nonperforming assets totaled $14.3 million, or 0.19% of total assets at September 30, 2025, compared to $14.9 million, or 0.20% of total assets at June 30, 2025 and $11.6 million, or 0.16% of total assets at September 30, 2024.

Net charge-offs in the third quarter of 2025 totaled $2.7 million, compared to net charge-offs of $4.7 million in the prior quarter, and net charge-offs of $3.6 million in the same quarter last year. The decrease in net charge-offs was primarily due to a $2.0 million full charge-off of a commercial and industrial loan during the second quarter of 2025. On an annualized basis, net charge-offs as a percentage of average loans was 0.20% in the third quarter of 2025, compared to 0.35% in the prior quarter, and 0.27% in the same quarter last year.

The allowance for credit losses on loans was 1.13% of total loans as of September 30, 2025, compared to 1.13% at June 30, 2025, and 1.15% at September 30, 2024.

Capital

Total shareholders' equity at September 30, 2025 was $588.1 million, compared to $568.9 million at June 30, 2025 and $543.7 million at September 30, 2024.

During the third quarter of 2025, the Company repurchased 78,255 shares of common stock at a total cost of $2.3 million, or an average price of $29.95 per share. As of September 30, 2025, $23.0 million remained available under the Company's share repurchase authorization.

The Company's regulatory capital ratios remained strong, with leverage ratio of 9.7%, a Common Equity Tier 1 ratio of 12.6%, a Tier 1 risk-based capital ratio of 13.5%, and a total risk-based capital ratio of 15.7% at September 30, 2025.

On October 1, 2025, the Company notified holders of its 4.75% fixed-to-floating rate subordinated notes due 2030, that it would be redeeming the notes in full on the November 1, 2025 call date. These notes, which currently total $55.0 million in principal outstanding, will be redeemed at par.

On October 28, 2025, the Board of Directors declared a quarterly cash dividend of $0.28 per share. The dividend represents an increase of 3.7% from $0.27 per share in the third quarter of 2025 and will be payable on December 15, 2025, to shareholders of record as of November 28, 2025.

Strategic Partnership

On October 6, 2025, Central Pacific Bank ("CPB") entered into a strategic partnership with The Kyoto Shinkin Bank ("KSB"), with the signing of a Memorandum of Understanding, to create a stronger economic bridge between Hawaii and Japan. The partnership will expand business opportunities and connect customers of both institutions across the Pacific for the benefit of both banks.

Conference Call

The Company's management will host a conference call today at 2:00 p.m. Eastern Time (8:00 a.m. Hawaii Time) to discuss its third quarter of 2025 financial 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 and entering the conference ID: 6299769.

A replay of the call will be available through November 28, 2025, by dialing 1-800-770-2030 and entering the same conference 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 $7.42 billion in assets as of September 30, 2025. Its primary subsidiary, Central Pacific Bank, operates 27 branches and 55 ATMs in the State of Hawaii. Central Pacific Financial Corp. is listed on the New York Stock Exchange under the symbol "CPF." For additional information, please visit: cpb.bank.

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Forward-Looking Statements

This document may contain forward-looking statements ("FLS") concerning, among other things: 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. These statement may also include the 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 or actions. In addition, such statements may address anticipated economic performance, the expected impact of business initiatives, and the assumptions underlying any of the foregoing.

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While we believe that our FLS and their underlying assumptions are reasonably based, such statements are inherently subject to risks and uncertainties that may cause actual results to differ materially from expectations. Factors that may lead to such differences, include, but are not limited to: the persistence or resurgence of inflationary pressures in the United States and our market areas, and their effect on market interest rates, economic conditions, and credit quality; the impact of the current U.S. administration’s economic policies, including potential international tariffs, and other cost cutting initiatives; the adverse effects of bank failures on customer confidence, deposit behavior, liquidity, and regulatory responses; the effects of pandemics, epidemics, and other public health emergencies, including their impact on Hawaii's tourism and construction sectors and on our borrowers, customers, vendors and employees; supply chain disruptions, labor contract disputes, strikes; adverse trends in the real estate or construction industries, including rising inventory levels or declining property values; deterioration in borrowers' financial performance leading to increased loan delinquencies, asset quality issues, or loan losses; the impact of local, national, and international economic conditions and natural disasters (such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, or earthquakes) on our markets and major industries within Hawaii; weakness in domestic economic conditions, including instability in the financial industry, deterioration in real estate markets, and declines in consumer or business confidence; revisions to estimates of reserve requirements under applicable regulatory and accounting standards; the impact of legislative and regulatory developments, including the Dodd-Frank Act, changing capital and consumer protection rules, and new regulations affecting our operations and competitiveness; legal and regulatory proceedings, including actual or threatened litigation and the efforts of governmental and regulatory exams and orders, as well as the costs of ongoing or potential compliance efforts; the effects of accounting standard changes adopted by regulatory agencies, the PCAOB, or the FASB, and the cost and resources associated with implementation; changes in trade, monetary, or fiscal policy, including actions by the Federal Reserve; market volatility and monetary fluctuations, including the transition away from the LIBOR Index; declines in our market capitalization or the price of our common stock; the effects and cost of acquisitions, dispositions, or strategic transactions we may make or evaluate; political instability, acts of war, terrorism, or other geopolitical conflicts; shifts in consumer spending, borrowing, and savings behaviors; technological changes and developments; cybersecurity incidents, data privacy breaches, or fraud involving us or third-party vendors; deficiencies in internal control over financial reporting or disclosure controls, and our ability to remediate them; increased competition among financial institutions and other financial service providers; our ability to achieve efficiency ratio improvement goals; our ability to attract and retain key personnel; changes in our personnel, organization, compensation and benefit plans; and related reputational or regulatory exposures; and risks related to the United States fiscal debt, deficit, and budget uncertainties.

For further information on factors that could cause actual results to differ materially from the expectations or projections expressed in our FLS, please refer to the Company's filings with the U.S. Securities and Exchange Commission, including the Company's most recent Forms 10-Q and 10-K, particularly, 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 occurring after the date on which such statements are made, or to reflect the occurrence of unanticipated events, except as required by law.